This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Impossibility of performance, which is created by a subsequent valid act of domestic law, operates as a discharge of a contract.1 Subsequent legislation which impairs the obligation of a contract is ordinarily unconstitutional. Under the exercise of the police power, however, the legislature may make illegal the performance of contracts already entered into.2 Such a change of law operates as a discharge of prior contracts which are thus made illegal; since otherwise the law would enforce a penalty against the promisor if he performed, and award damages against him if he did not.
Mo. App. 113, as being a contract to conduct a school in the specific building which was burned.
10 Ontario, etc., Co. v. Galloway Co., 5 Ont Law Rep. 419.
1 Canada. Ottawa v. Ry., 1 Ont. Law Rep. 377.
Georgia. Macon, etc., R. R. v. Gibson, 85 Ga. 1, 21 Am. St. Rep. 135, 11 S. E. 442.
Indiana. Baltimore & O. R. Co. v. Miller, 183 Ind. 323, 107 N. E. 545.
Kentucky. Louisville & N. R. Co. v. Crowe, 156 Ky. 27, 49 L. R. A. (N.S.) 848, 160 S. W. 759.
Maine. American Mercantile Exchange v. Blunt, 102 Me. 128, 120 Am. St. Rep. 463, 10 L. R. A. (N.S.) 414, 66 Atl. 212.
Maryland. Standard Brewing Co. v. Weil, 129 Md. 487, L. R. A. 1917C, 929, 09 Atl. 661.
Minnesota. Halloran v. Schmidt Brewing Co., 137 Minn. 14a, L. R. A. 1917E, 777, 162 N. W. 1082.
Mississippi. Brown v. Dillahunty, 12 Miss. (4 Sm. & M.) 713, 43 Am. Dec. 499.
Washington. Cowley v. Northern P. R. Co., 68 Wash. 558, 41 L. R. A. (N.S.) 559, 123 Pac. 998; The Stratford v. Seattle Brewing & Malting Co., 94 Wash. 125, L. R. A. 1917C, 931, 162 Pac 31; Bell v. Kanawha Traction &
Electric Co., - W. Va. -, 98 S. E. 885.
See, Moratory Legislation Relating to Bills and Notes and the Conflict of Laws, by E. G. Lorenzen, 28 Yale Law Journal, 324.
This point was avoided in Stent v. Bailis, 2 P. Wms. 218.
"Now a subsequent law may be the cause of an impossibility, whether by actually forbidding an act undertaken in the contract - which is the direct meaning of illegality - or whether by means of taking away something from the control of the party, as to which thing he has contracted to do or not to do something else." Metropolitan Water Board v. Dick , A. C. 119.
Whether legislation which prevents performance of prior contracts is valid, see ch. XCV.
2 United States. Louisville & Nashville Ry. v. Mottley, 219 U. S. 467, 55 L. ed. 297, 34 L. R. A. (N.S.) 671 [reversing, Louisville & Nashville Ry. v. Mottley, 133 Ky. 652, 118 S. W. 982].
Indiana. Jamieson v. Oil Co., 128 Ind. 555, 12 L. R. A. 652, 28 N. E. 76; Baltimore & O. R. Co. v. Miller, 183 Ind. 323, 107 N. E. 546.
Kentucky. Louisville & N. R. Co. v. Crowe. 156 Ky. 27, 49 L. R. A. (N.S.) 848, 160 S. W. 759.