Lecture 15

Answer 1

The doctrines of impossibility, impracticability and frustration apply only where the parties themselves did not allocate the risk

Answer 2

3 types of impossibility:

Destruction of subject matter
Failure of the agreed upon means of performance
Death or incapacity

Answer 3

If property which the performing party expected to use is destroyed, that party is discharged only if the destroyed property was specifically referred to in the contract or at least understood by both parties to be the property that would be used

Answer 4

If a building contractor contracts to construct a building from scratch on particular land and the building is destroyed by fire when it is partially completed,most courts hold that the contractor may not use the defense of impossibility

Answer 5

But when a party contracts to repair an existing building that party usually will be discharged if the building is destroyed

Answer 6

Destruction of identified goods before the risk of loss passed,the contract will be discharged

Answer 7

If the contract is a destination contract the seller cannot use the impossibility defense if the goods are destroyed while in transit

Answer 8

Impossibility of intangible but essential mode of performance,the contract may be discharged

Answer 9

If non essential aspects of the contract such as ones dealing with the means of delivery or means of payment - not discharged

Instead a commercially reasonable substitute must be used

Answer 10

Death or illness .. if a contract specifically provides that performance shall be made by a particular person that person’s death or incapacity will discharge both parties

Answer 11

Contract will also be discharged by death or illness of third party who is necessary to performance of the contract

Answer 12

Supervening illegality is treated as a kind of impossibility

Answer 13

Most impracticability cases relate to extreme cost increases suffers by sellers who have signed fixed price contracts

Answer 14

It is likely that the seller will lose if the increase was foreseeable

Question 15

Foreseeability and relative expertise

Answer 15

The more foreseeable it was the more likely it is that the performing party will be found to have borne the risk of it

The degree to which the performing party has greater expertise in evaluating the risk than the other. The greater the performing party expertise the more likely the party is to be found to have assumed the risk

Answer 16

When the unexpected event has only partially reduced the quantity that the seller can supply the seller is permitted to allocate production and deliveries among his customers. May include regular customers not then under contract