In which situation would a defense of impossibility of performance not exist?

The defense of impossibility of performance is applicable when an unforeseen event makes it practically or legally impossible for a party to fulfill their contractual obligations. In the case of the correct answer, if a party anticipates higher costs due to an event, this does not constitute impossibility. Instead, it indicates a situation where the performance is still possible but may become less financially viable or more burdensome.

Impossibility is focused on scenarios where performance cannot occur at all—such as loss of the subject matter or a change in law that renders the contract illegal. Anticipating higher costs reflects a change in the economic feasibility of performance, not the actual inability to perform. Consequently, the contract still remains enforceable, and the party must either comply or seek renegotiation or termination of the contract based on the situation rather than claiming impossibility.