Contracts Ii - Non Cases

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Modern Impossibility, Impracticability & Frustration- Restatement View
R (2nd) § 261

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i) Performance must be literally impossible
ii) The excused party must not bear the risk of the occurence of the supervening event as a basic assumption
iii) the event must have occured without fault of the excused party
iv) the contract must not have assigned the risk of the event to the excused party §261

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R (2nd) of Contracts § 265

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A party's performance duty is discharged when the party's principal purpose for entering the contract is substantially frustrated without fault of that party. Must be basic assumption for the contract formation & no allocation of risk

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UCC § 2-615

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§ 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.

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UCC § 2-615, cmt. 9

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9. The case of a farmer who has contracted to sell crops to be grown on designated land 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.
Exemption of the buyer in the case of a "requirements" contract is covered by the "Output and Requirements" section both as to assumption and allocation of the relevant risks. But when a contract by a manufacturer to buy fuel or raw material makes no specific reference to a particular venture and no such reference may be drawn from the circumstances, commercial understanding views it as a general deal in the general market and not conditioned on any assumption of the continuing operation of the buyer's plant. Even when notice is given by the buyer that the supplies are needed to fill a specific contract of a normal commercial kind, commercial understanding does not see such a supply contract as conditioned on the continuance of the buyer's further contract for outlet. On the other hand, where the buyer's contract is in reasonable commercial understanding conditioned on a definite and specific venture or assumption as, for instance, a war procurement subcontract known to be based on a prime contract which is subject to termination, or a supply contract for a particular construction venture, the reason of the present section may well apply and entitle the buyer to the exemption.

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impossibility v. latent defect

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latent defect allows for the recission of the entire contract (AB INITIO) while impossibility is getting out of the contract from the time of the impossibility

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R (2nd) K § 154 cmt c.

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Conscious ignorance is no excuse for not foreseeing the problem

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foreseeability on impossible contracts (farnsworth view)

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If they foresaw it, then search for who's risk it should have been, if they didn't then be just and equitable