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Case Scenario Millie contracted to sell Frank 10,000 bushels…

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Case Scenario Millie contracted to sell...
Case Scenario

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.

In your analysis be sure to:

Discuss the elements of impossibility of performance and the three situations where this defense can be used.

Discuss commercial impracticability and its application to the this case.
Submitted: 6 years ago.Category: Single Problem
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2/29/2012
Business Tutor: lwpat,
 replied 6 years ago
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The first issue is whether this falls under the UCC. Here both Millie and Frank would be considered merchants and the UCC applies.

§ 2-615. Excuse by Failure of Presupposed Conditions.

Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance:

  • (a) Delay in delivery or non-delivery in whole or in part by a seller who complies with paragraphs (b) and (c) is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.
  • (b) Where the causes mentioned in paragraph (a) affect only a part of the seller's capacity to perform, he must allocate production and deliveries among his customers but may at his option include regular customers not then under contract as well as his own requirements for further manufacture. He may so allocate in any manner which is fair and reasonable.
  • (c) The seller must notify the buyer seasonably that there will be delay or non-delivery and, when allocation is required under paragraph (b), of the estimated quota thus made available for the buyer.

Official Comment 9 (1989) says:

The case of a farmer who has contracted to sell crops to be grown on designated land [emphasis added] may be regarded as falling either within the section on casualty to identified goods or this section, and he may be excused, when there is a failure of the specific crop, either on the basis of the destruction of identified goods or because of the failure of a basic assumption of the contract.

Here the contract specifically called for corn grown on Millie's farm so her performance is excused.

However, if she had just contracted to provide 10,000 bushels of corn, then her performance would not be excused.

See

Red River Commodities, Inc. v. Eidsness, 459 N.W.2d 805 (ND 1990)

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