When the issue [of impossibility] of performance is raised, the court is asked to construct a condition of performance based on the changed circumstances, a process that involves at least three reasonably definable steps.
- First, a contingency (something unexpected) must have occurred.
- Second, the risk of the unexpected occurrence must not have been allocated either by agreement or by custom.
- Finally, occurrence of the contingency must have rendered performance commercially impracticable. Unless the court finds these three requirements satisfied, the plea of impossibility must fail.