FRUSTRATION OF PURPOSE

Question 1

FRUSTRATION OF PURPOSE

Answer 1

The doctrine of frustration of purpose applies when unforeseen events arise that make a contract impossible to perform, entitling the frustrated party to rescind the contract without paying damages.

Question 2

Impracticability of Performance—UCC

Answer 2

UCC implies three conditions into contracts for the sale of goods, which must be satisfied before performance is excused:
(1) a contingency has occurred; (2) the contingency has made performance impracticable; (3) the nonoccurrence of that contingency was a basic assumption upon which the contract was made.

Question 3

Total Impracticability

Answer 3

Impracticability of performance provides an excuse (defense) for nonperformance of the contract similar to impossibility at common law. This excuse exists when: (only applies when the event was not foreseeable and when nonoccurrence of the event was a basic assumption of the contract).

i) Goods identified at the time of contracting are destroyed
ii) Performance becomes illegal
iii) Performance has been made impracticable

Question 4

Partial Impracticability

Answer 4

When impracticability affects only part of the seller’s ability to perform, the goods actually produced must be apportioned among all the buyers with whom the seller has contracted. The buyer, however, may refuse to accept and may cancel the contract
i) When the agreed method of transportation or payment becomes impracticable, (1) the performing party must use a commercially reasonable substitute if available, and (2) substitute performance must be accepted.