Actually there is a possibility that you can fail a quest, because there are some story questlines that intersect/contradict eachother. Don't want to spoil anything, but it is pretty obvious when it will happen as long as you pay attention. In some cases you actually get a pop up asking you if you want to go through with it, so it should be pretty straight forward. As for failing side missions, I have yet to to find one that I could fail.