This paper purports to clarify the notion and the legal consequences of the subsequent difficulties in performance of a bilateral contract, which occur due to an unforeseeable change in circumstances under which the contract was concluded. A part of the paper deals with the conditions for invoking the change in circumstances pursuant to Serbian and comparative contract law. In addition, the paper attempts to distinguish subsequent difficulties in performance from the different types of impossibility, such as impossibility to fulfil the purpose of transaction, objective impossibility of performance, subjective impossibility of performance, practical impossibility, and economic impossibility. The difficulties in performance occur after conclusion of the contract and are assessed in relation to what the promisor knew, or was obliged to know at the time of conclusion. If a contract becomes excessively difficult to perform, but not impossible, the promisor would not be discharged on that account, but may be able to seek termination, or judicial adjustment of the contract. In contrast, the subsequent impossibility of performance may lead to contract termination, but cannot be the grounds for judicial adjustment of the contractual content. The subsequent difficulty in performance of a contract is not easily distinguished from the so-called practical impossibility. The performance is deemed to be practically impossible if it would be contrary to reason, good faith, or the principles of fair trade to require the debtor to perform as initially agreed.