Contract gave right of inspection for the insurance. The insurance company inspected the farm and the condition was not satisfiedIf the contract is read as a condition, then there is no liabilityNot as condition precedent, defendant cannot escape liability if there are other ways that the insurance company can access the insurance loss for liableWhy did the farmers plow in the crops right away?The ruined crops would cause bugsChanged Circumstances: Impracticability and Frustration of purposeoImpracticability defenseis “an equitable one to be applied when fair and just and a promisor “should not be required to bear the cost
of changed circumstance that could not reasonably be provided against in the contract” and have made performance: vitally different from what was anticipated when the contract was madeoDetermining when, if ever, relief from changed circumstances should be granted asks these questions1) what was the nature of the risk event and what was it impacton the contractual relationship?oWas the event a condition which existed at the time of contracting or a circumstance which arose thereafter?oWas the impact of the event that performance as agreed was prevented or made more costly or that the incentive of tone party to perform was impaired because its purpose in entering the contract was frustrated2) Was the party seeking relief at fault in that it caused the event or failed to take reasonable steps either to avoid it or to minimize the impact?3) if the party seeking relief was not a fault did the agreement allocate the risk of the even to one or the other or both parties?oThe form of agreement may include an express condition,an excuse or “force majeure clause” or a more elaborate risk allocation system, including insuranceExample of a force majeure clause P.863 footnoteoOr it might be concluded that because the risk was discussed or foreshadowed in the negotiations, it was tacitly agreed to by the promisor who made an unconditional promise to perform at a fixed price4) if there was no agreement, express or implied, allocating the risk, how is the court to fill the gap in risk allocation?oOne method is for the court to refuse to impose any risk allocation terms on the parties
In short, the maker of an unconditional promise bears the full risk of the event and its impactoA more flexible test, adopted by section 261 of restatement 2ndWhere after a contract is made, a party’s performance is made impracticable without his faultby the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged, unless the language or the circumstance indicate the contraryDerived from UCC 2-615(a)5) what is the nature and scope of relief when the conditions of section 261 or UCC 2-615(a) are satisfied?
You've reached the end of your free preview.
Want to read all 121 pages?
- Fall '14