Should Trade Wars Discharge Parties from Performing Their Contractual Obligations?
If a contract is impractical to perform, the parties to the contract are discharged from performing, meaning that they have no further obligation under the contract. A court will discharge performance under a theory of impracticability when something unforeseen happens, after the parties enter into the contract, that makes the performance of the contract unreasonably difficult or expensive.
Hypothetical Example: On November 1st, Curtis Condos contracts with Refrigerators R Us to supply and install 100 refrigerators in Curtis Condos' new 100 unit condo building. In exchange, Curtis Condos will pay Refrigerators R Us $120,000. On November 14th, the U.S. government imposes a 30% increase on tariffs imposed on appliances delivered by China to the U.S. As a result of the tariffs, it will now cost Refrigerators R Us $30,000 more to perform its obligation under the contract. In your opinion, should the parties to this contract be discharged from performing on the basis of impracticability? Why or why not?
If a contract is impractical to perform, the parties to the contract are discharged from performing, meaning that they have no further obligation under the contract. A court will discharge performance under a theory of impracticability when something unforeseen happens, after the parties enter into the contract, that makes the performance of the contract unreasonably difficult or expensive.
Hypothetical Example: On November 1st, Curtis Condos contracts with Refrigerators R Us to supply and install 100 refrigerators in Curtis Condos' new 100 unit condo building. In exchange, Curtis Condos will pay Refrigerators R Us $120,000. On November 14th, the U.S. government imposes a 30% increase on tariffs imposed on appliances delivered by China to the U.S. As a result of the tariffs, it will now cost Refrigerators R Us $30,000 more to perform its obligation under the contract. In your opinion, should the parties to this contract be discharged from performing on the basis of impracticability? Why or why not?
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