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Section 56: Agreement to do impossible act

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1872
Section 55 All 266 Sections of Indian Contract Act Section 57
Statutory Defined Terms in this Section: (Click any term for official legal definition)
Promise Sec 2(b) Promisor Sec 2(c) Agreement Sec 2(e) Contract Sec 2(h)

Legal Commentary & Landmark Judgments: Section 56

An agreement to do an act impossible in itself is void ab initio. Where a contract valid at inception subsequently becomes impossible or unlawful to perform due to an unforeseen supervening event beyond the control of the parties, the contract becomes void the moment the act becomes impossible or unlawful, discharging all parties by operation of the doctrine of frustration.

  • Core Legal Standard: Frustration requires a fundamental transformation of the contractual substratum, rendering performance physically or legally impossible, rather than merely commercially onerous, difficult, or unprofitable.
  • Operational Mechanism & Scope: Furthermore, under the third limb of the section, where a promisor knew or ought to have known of the impossibility while the promisee was unaware, the promisor must compensate the innocent promisee for all losses sustained through non-performance.

This statutory framework establishes clear operational guidelines, balancing legal compliance with procedural safeguards.

Key Landmark Precedents:
  • Satyabrata Ghose v. Mugneeram Bangur & Co. (AIR 1954 SC 44): The Supreme Court authoritatively held that the doctrine of frustration under Indian law is exhaustive and codified in Section 56, superseding English common law rules. Impossibility is not confined to physical or literal impossibility; it encompasses supervening circumstances that fundamentally upset the foundation and commercial purpose upon which the contracting parties stood.
  • Energy Watchdog v. Central Electricity Regulatory Commission (2017) 14 SCC 80: The Supreme Court clarified that where parties have expressly provided for force majeure contingencies within their contract, Section 32 governs; Section 56 applies only where supervening impossibility arises outside the contract. Furthermore, mere commercial difficulty, economic unviability, or price escalation does not frustrate a contract.
  • Alopi Parshad & Sons Ltd v. Union of India (AIR 1960 SC 588): The Supreme Court held that parties cannot be absolved from contractual commitments merely because the performance of obligations has become unexpectedly burdensome or financially onerous due to changing market conditions.
Legal Commentary:

Commercial contracts during pandemics, wars, or sudden regulatory shifts frequently trigger Section 56 litigation. Courts interpret Section 56 strictly: economic hardship, currency fluctuations, or supply chain bottlenecks never constitute frustration. Where Section 56 operates to discharge a contract, Section 65 immediately mandates full restitution of all benefits and advances received.

Section 55 All 266 Sections of Indian Contract Act Section 57