Chapter IV - Of the Performance of Contracts
Section 56
Section 56: Impossible or unlawful performance
Section 56 addresses an initially impossible act, later impossibility or unlawfulness, and a promisor's compensation responsibility where the impossibility or illegality was known or should have been known in the stated circumstances.
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Need advice on Section 56?
This article is for general information. Refer to the Indian Contract Act, 1872 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
An agreement to do an act impossible in itself is void.
Contract to do an act afterwards becoming impossible or unlawful.—A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
Compensation for loss through non-performance of act known to be impossible or unlawful.— Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise.
Illustrations
(a) A agrees with B to discover treasure by magic. The agreement is void.
(b) A and B contract to marry each other. Before the time fixed for the marriage, A goes mad. The contract becomes void.
(c) A contracts to marry B, being already married to C, and being forbidden by the law to which he is subject to practise polygamy, A must make compensation to B for the loss caused to her by the non-performance of his promise.
(d) A contracts to take in cargo for B at a foreign port. A’s Government afterwards declares war against the country in which the port is situated. The contract becomes void when war is declared.
(e) A contracts to act at a theatre for six months in consideration of a sum paid in advance by B. On several occasions A is too ill to act. The contract to act on those occasions becomes void.
Rule and business relevance
An agreement to do an inherently impossible act is void. A contract becomes void when later performance becomes impossible or, through an event the promisor could not prevent, unlawful. The third paragraph protects a promisee unaware of impossibility or unlawfulness which the promisor knew or could have known with reasonable diligence.
Limits and related provisions
Reduced profit, inconvenience or increased cost should not automatically be labelled legal impossibility. Contract terms, causation, preventability and the governing law require assessment. A contractual force-majeure clause and restoration of benefits may raise related but separate questions.
Hypothetical business example
Hypothetical: a new legal prohibition prevents a promised transaction after agreement. The parties identify the actual prohibition and its effect, then assess Section 56 and benefits already exchanged rather than merely citing a general business downturn.
Practical decision flow
Identify the promised act and whether impossibility existed initially or arose later.
Establish the event, legal prohibition or other impossibility and examine knowledge, diligence and preventability.
Assess the contractual terms, resulting voidness and any compensation or restitution obligations separately.
Check the applicable legal framework
This guide explains the central provision. Applicable State amendments, the agreement, transaction date and other governing laws can affect its application. Check the current legal framework before relying on it for a commercial decision.
Practical checklist
Do
- Identify the promised act and whether impossibility existed initially or arose later.
- Establish the event, legal prohibition or other impossibility and examine knowledge, diligence and preventability.
- Assess the contractual terms, resulting voidness and any compensation or restitution obligations separately.
Avoid
- Reduced profit, inconvenience or increased cost should not automatically be labelled legal impossibility. Contract terms, causation, preventability and the governing law require assessment. A contractual force-majeure clause and restoration of benefits may raise related but separate questions.
Glossary
- Supervening impossibility
- Impossibility arising after the contract was made.
- Reasonable diligence
- The care relevant to what the promisor might have known under the compensation limb.
Frequently asked questions
Is a less profitable bargain automatically void?
No. The statutory impossibility or unlawfulness conditions must be established.
Can a promisor owe compensation despite impossible performance?
Yes, under the third paragraph's knowledge, diligence and promisee-ignorance conditions.
Are advance payments automatically ignored?
No. Restoration of benefits and other relevant provisions need separate consideration.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026