What key factor determines whether a party can claim commercial impracticability?

The ability of a party to claim commercial impracticability primarily hinges on the emergence of unforeseen circumstances that create excessive challenges to the performance of a contract. This concept arises from the doctrine in contract law that allows for relief when an unforeseen event fundamentally alters the nature of what was agreed upon, making the fulfillment of the contract disproportionately burdensome or impossible.

In this context, the focus on unforeseen excessive challenges underscores the principle that the party asserting impracticability was not aware of these challenges at the time of contract formation. If the circumstances were known or should have been anticipated, the claim for impracticability would likely fail, as parties are expected to account for potential risks when entering into contracts.

The other options either do not address the core requirements of impracticability or suggest conditions that do not align with the legal standards for asserting this defense. For instance, merely experiencing higher profits or facing regulatory challenges does not inherently justify relief under the doctrine. Similarly, mutual agreement to disregard terms does not relate to the concept of impracticability, which is grounded in the unanticipated nature of performance demands rather than a consensus to modify contractual obligations.