When a new law suddenly changes how a business must operate, it introduces significant risks into contracts already signed by potentially altering the fundamental assumptions and feasibility of performance. This situation primarily affects existing contracts through several key legal principles and contractual clauses. Firstly, the performance required under the contract might become impossible. Impossibility of performance occurs when, due to an unforeseeable event like a new law, a party simply cannot fulfill their contractual obligations. For example, if a new law bans the manufacturing or sale of a specific product that is the subject of a supply contract, delivering that product becomes legally impossible. In such cases, the contract may be discharged, meaning both parties are released from their obligations. Secondly, the new law might lead to impracticability or frustration of purpose. Impracticability arises when performance is not strictly impossible but becomes excessively burdensome, ex....
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