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Unformatted text preview: Performance
If, after the parties have made the contract, a reasonably unforeseeable event occurs that
makes it objectively impossibly to perform the contract, the contract is discharged. This
means that it must be impossible for anyone, not just the contracting party, to perform.
Example 6.11. Simon contracts to sell his original Picasso painting to Bianca
for $10 million. The painting is destroyed in a house fire. Simon is discharged and will not be liable to Bianca.
Example 6.12. Finley contracts to sell 100 bushels of corn to Bryan. Finley’s
corn crop is destroyed by an unusually violent storm. Finley is not discharged, because someone else could deliver 100 bushels of corn, so there
is no objective impossibility.
Contracts for personal services are generally discharged by death of either party, while
contracts for goods or real estate are not. For example, if Peter contracts to paint Harry’s
portrait, and either one of them dies before the portrait is painted, the contract is discharged. But if Peter contracts to sell Harry his house, the contract can still be performed
by the estate, if one of them dies, and so it is not discharged.
Illegality obviously discharges a contract, since the law would not punish someone for
obeying it! If Gina contracts to employ Oliver as manager of her casino, and then the state
outlaws gambling, Oliver is out of a job. Commercial Impracticability Members of Missouri Task Force One search-and-rescue
team work at a tornado-damaged Home Depot store in May
of 2011 in Joplin. A large tornado moved through much of
the city, damaging a hospital and hundreds of homes and
businesses. Where such a catastrophic event occurs, it is
likely that any number of contracts may be discharged due to
impossibility of performance. What if the unforeseen event simply
makes it more difficult to perform?
Whether the contract is discharged is
mainly a question of degree. For example, if Omega Oil Company contracts to
supply Alpha Airlines with jet fuel at a
set price for the next two years, and then
the price of fuel goes up 35 percent, is
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.
- Spring '10
- Business Law