Performance was excused

Question 1

Excused performance

Answer 1

The promisor may not be liable to nonperformance if some supervening event or change in circumstances arises after the contract was formed that discharges the promisor’s duty to perform.

Question 2

Impracticability

Answer 2

A party’s duty to perform can be excused by impracticability. This defense is available if: 1) the subject matter of the contract is destroyed; 2) in a personal services K, the performing party dies or becomes incapacitated; 3) performance becomes illegal after contract; 4) performance becomes impracticable AND the following conditions have been met: 1) an unforeseen event has occurred; 2) non-occurrence of such event was a basic assumption on which the contract was made; and 3) the party seeking discharge is not at fault. The facts showed, this was outside of D’s control….The cost would be substantial and made the project not profitable for D. Making a project unprofitable is probably inadequate for a court to find impracticability. If D could show that the cost is so burdensome that he would be forced out of business, then that would establish impracticability. In conclusion, the court will probably not find that performance was excused by impracticability.

Question 3

Frustration of Purpose

Answer 3

Even if performance of the contract is not rendered impracticable, the doctrine of frustration of purpose applies when an unexpected event arise that destroys one party’s purpose in entering into the contract. The frustrated party is entitled to rescind the contract without paying damages. The event that arises must not be the fault of the frustrated party and the event non- occurring was a basic assumption of the contract. The event is not an assumed inherent risk under the contract.

Here, ……the purpose of the K was to make a profit on the —— of…… . P was aware of the purpose of the K. Circumstances did change after the parties entered into the K. The fact that X made a surprising change was not D’s fault. Additionally, as evidenced by the conversation between the parties, the non occurrence of the event was a basic assumption of the contract.