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.
If a party to a contract enters into a positive and absolute undertaking to do certain things, in which, by express terms or necessary implication, he binds himself to pay damages in the event that he does not do what he agreed to do, subsequent impossibility of performance does not operate as a discharge.1 Thus if A makes a positive and unqualified contract to remove and rebuild a school-house, the fact that such house is blown down by a windstorm does not discharge A from liability.2 So a contract to construct a windmill and dig a well, which the contractor agrees shall furnish a good water supply for stock, is not discharged by the fact that the season in which the breach occurred was an unusually dry one.3 A contract by which a bank which holds certain stock as collateral for a note agrees to secure an assignment of such stock as security for another note, is not discharged by the fact that the conditions which attached to the original deposit of the stock, but were not disclosed by the bank, prevent the performance of such contract.4 A sold to B some land in which a building was situated, and agreed to keep the building insured to protect B's interest. B was to pay for the land in instalments, and to have a deed when the land was paid for. Subsequently the building was destroyed by fire, and A collected the insurance, the amount of which exceeded the amount then due from B. B demanded a deed for the property and the payment of the difference between the amount of the insurance received by A and the amount still due from B to A. It was held that inasmuch as the contract provided for the contingency of the destruction that the destruction of the building did not operate as a discharge.5 If A contracts with B to do certain things, the fact that A has a contract with X, which he expects X to perform, and by means of which he expects to be able to perform his contract with B, and the further fact that thereafter X breaks his contract with A, do not amount to such impossibility as to discharge A from his contract with B.6 Thus A, a contractor, agreed to build a house for B, and by the terms of the contract B was to supply all the materials as needed. A employed X to do certain work upon such building, and X knew of A's contract with B. B's failure to perform, causing A to break his contract with X, does not operate as a discharge.7 A contractor who has an opportunity to examine specifications, and who makes an absolute contract to perform certain work under them, at a certain price, is not discharged from liability because he is unable to perform the contract by reason of some defect in the specifications.8 Thus a contract to construct a wooden sewer is not discharged because the specifications require a turn which it is impracticable for the contractor to make.9 One who agrees to construct a well according to certain specifications can not recover for damages caused by the caving in of the well, due to an inherent defect in the curb specified by the contract10
1 England. Ashmore v. Cox , 1 Q. B. 436.
Connecticut. School Dist. v. Dauchy, 25 Conn. 530, 68 Am. Dec. 371.
Illinois. Steele v. Buck, 61 Ill. 343, 14 Am. Rep. 60; Summers v. Hibbard,
153 Ill. 102, 46 Am. St. Rep. 872, 38 N. E. 899.
Minnesota. Cowley v. Davidson, 13 Minn. 92; Anderson v. May, 50 Minn. 280, 36 Am. St. Rep. 642, 17 L. R. A. 555, 52 N. W. 530.
New York. Wilkinson v. Insurance Co., 72 N. Y. 499, 28 Am. Rep. 166.
North Dakota. Grady v. Schweinler, 16 N. D. 452, 125 Am. St. Rep. 674, 14 L. R. A. (N.S.) 1089, 113 N. W. 1031.
Ohio. State v. Worthington, 7 Ohio 171; Board of Education v. Townsend, 63 O. S. 514, 52 L. R. A. 868, 59 N. E 223.
"A party may by an absolute contract bind himself or itself to perform things which subsequently become impossible, or pay damages for the nonperformance, and such construction is to be put upon an unqualified undertaking, where the event which causes the impossibility might have been anticipated and guarded against in the contract, or where the impossibility arises from the act or default of the promisor. But where the event is of such a character that it can not be supposed to have been in contemplation of the contracting parties when the contract was made, they will not be held bound by general words, which, though large enough to include were not used with reference to the posi-bility of the particular contingency which afterwards happens." Chicago, etc., Ry. v. Hoyt, 149 U. S. 1, 14, 37 L. ed. 630.
"Where a party has expressly undertaken without qualification to do anything not naturally or necessarily impossible under all circumstances and he does not do it, he must make compensation- in damages, though the performance was rendered impracticable or even impossible by some unforeseen cause over which he had no control but against which he might have provided in his contract." Wilmington Transportation Co. v. 0'Neil, 98 Cal. 1, 5, 32 Pac 705 [quoted in Sample v. Irrigation Co., 129 Cal. 222, 228, 61 Pac 1066].
2 Board of Education v. Townsend, 63 O. S. 514, 52 L. R. A. 868, 59 N. E. 223.
3 Wernli v. Collins, 87 Ia. 548, 54 N. W. 365.
4 First National Bank v. Park, 117 Ia. 552, 91 N. W. 826.
5 Allyn v. Allyn, 154 Mass. 570, 23 N. E. 770.
6 Perine v. Standfield, 107 Mich. 553, 65 N. W. 541.