Contracts Part II
Unit 5 Case Study
November 6, 2010
Millie contracted to sell Frank 10,000 bushels of corn to be grown on Millie’s farm. Due to a drought during the growing season, Millie’s yield was much less than anticipated, and she could deliver only 250 bushels to Frank. Frank accepted the lesser amount but sued Millie for breach of contract. Can Millie defend successfully on the basis of outcome impossibility of performance? Explain. Discuss the elements of impossibility of performance and the three situations where this defense can be used.
According to Miller and Jentz after a contract has been made, performance may become impossible in an objective sense. (2010) Impossibility of performance may discharge the contract. If the performance is too difficult or costly due to an unexpected event then a court will consider it commercially unfeasible or impracticable. Objective impossibility is based on three types of situations that qualify for discharge of contractual obligations. The first is when a party whose personal performance is essential to the completion of the contract dies or becomes incapacitated prior to performance. The second is when the specific subject matter of the contract is destroyed. The third is when a change in the law renders performance illegal.
Millie can use the defense that the remaining bushels were damaged in the drought of the growing season. Because the subject matter was destroyed, Millie is freed of the contract to Frank. It is impossible for Millie to sell an object that is not available for sale. Millie had no way of knowing that her crop was going to be affected by a drought.
Miller, R., &Jentz, G. (2008).Fundamentals of business law part I. Boston, MA: Cengage.
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