I was contracted to perform a specific service, but it later became physically or legally impossible to do — am I released from the contract?

Three things have to be true

Article 1266 is compact: The debtor in obligations to do shall also be released when the prestation becomes legally or physically impossible without the fault of the obligor. Read it as three conditions. The obligation must be one to do — to perform a service or an act, rather than to hand over a thing or pay a sum. The impossibility must be legal or physical, not commercial. And it must have arisen without the obligor's fault. Fail any one of them and the obligation stands, together with whatever the contract says about delay and damages while the dispute continues.

Legal and physical impossibility are different animals

Physical impossibility means the performance can no longer happen in the world: the structure to be repaired has been destroyed, the specific thing to be worked on no longer exists, or the obligor has died where the service was personal to him and could not be rendered by anyone else. Legal impossibility means the act, though perfectly possible, may no longer lawfully be done — a permit or franchise required for the work has been withdrawn, or a new prohibition covers the activity. Both are objective. That a particular obligor can no longer perform, while others in the market still can, is usually not impossibility at all.

The words 'without the fault of the obligor'

This is where most claims under the article fail. An obligor who let his own licence lapse, who disposed of the equipment the job required, or who failed to apply in time for the clearance the work depended on has manufactured his own impossibility, and Article 1266 does not reach it. Timing matters as much: a debtor already in delay when the obstacle arose is in a considerably weaker position, and Article 1174 excuses only events which could not be foreseen or which, though foreseen, were inevitable — and even then not where the law, a stipulation or the nature of the obligation places the risk on him.

What release actually gives you

Being released extinguishes the obligation to perform; it does not entitle you to keep payment for work never done. In a reciprocal contract the other side's counterpart obligation falls away with yours, and advances covering the unperformed portion are ordinarily returnable. Article 1267 is the neighbouring provision worth knowing, because it covers the case that stops short of impossibility: where the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor may also be released, in whole or in part. That partial release allows a contract to be trimmed rather than abandoned.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

• Asian Construction and Development Corporation vs. Philippine Commercial International Bank, G.R. No. 153827, April 25, 2006 — read the decision on LawPhil →
• Delfin C. Gonzalez, Jr. vs. Magdaleno M. Peña, et al, G.R. No. 214303, January 30, 2017 — read the decision on LawPhil →
• Raymundo S. De Leon vs. Republic of the Philippines, G.R. No. 170405, February 2, 2010 — read the decision on LawPhil →
• El Reyno Homes, Inc. vs. Ernesto Ong and Ma. Sonia Tan Soon Ha, G.R. No. 142440, February 17, 2003 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 1266 — Impossibility in Obligations to Do
• Civil Code, Article 1267 — Doctrine of Unforeseen Difficulty (Rebus Sic Stantibus)
• Civil Code, Article 1174 — Fortuitous Events
• Civil Code, Article 1191 — Rescission of Reciprocal Obligations