A contractual agreement’s obligation of performance cannot be excused unless it has become impossible by an act of God (earthquake, flood, tornado, etc), the law, or the other party.  Something that makes performance inconvenient but is not central to the act to be performed does not excuse performance of a contractual obligation.  Unless provided for in the contract, unforeseen hardship or the lack of sufficient financing will not excuse a person’s obligation to perform.  In order for a hardship excuse for nonperformance to be a successful breach of contract defense, that specific excuse must be identified in the contract.  See Moon v. Jordan, 390 S.E.2d 488 (S.C. Ct. App. 1990).

In Moon v. Jordan, Jordan agreed to buy the Moons’ house contingent upon receiving adequate financing.  The bank approved Jordan for the loan but before closing on the Moons’ house, the sale of Jordan’s house fell through.  Jordan then failed to show up at the Moons’ closing and the Moons sued for breach of contract.  Jordan argued that buying the Moons’ house had become financially impossible, making the contract void due to the contingency not being met.  However, a bank representative testified that the bank would have loaned Jordan the money regardless of her changed circumstances.  Thus, even though the sale of Jordan’s house did not close, she could still have obtained the money necessary to buy the Moons’ house.  The court determined that because the only contingency identified in the contract was that Jordan obtain financing, and nothing regarding the sale of her own house, Jordan’s unforeseen hardship did not provide her with an excuse for nonperformance nor a defense for breach of contract.  

What this means for you:

1) Any reason for which you seek to be excused from your contractual obligation, other than an act of God, a change in the law, or the other party’s fault, must specifically be listed in the contract. 

2) In other words, don’t count on unexpected financial hardship or inconvenience, no matter how devastating it may seem to you, to get you out of a contractual obligation unless you have specifically stated that circumstance in the contract.