Author Question: Commercial Impracticability. E+E (US) Inc, Manley Regan Chemicals Division, agreed to sell to ... (Read 96 times)

jessicacav · **on:** Jun 24, 2018

Commercial Impracticability. E+E (US) Inc, Manley Regan Chemicals Division, agreed to sell to Rockland Industries, Inc, three containers of antimony oxide for 1.80 per pound. At the time, both parties knew that there was a global shortage of the chemical, that prices were rising, and that Manley Regan would obtain its supply from GFI Chemicals, Inc When GFI could not deliver, Manley-Regan told Rockland that it could not fulfill the contract. Rockland bought an equivalent amount of the chemical elsewhere at an increased price and filed a suit in a federal district court against Manley-Regan to recover the difference between the cost of the substitute chemicals and the contract price. Manley Regan argued that the failure of delivery by GFI, its sole source for the oxide, excused its failure to perform on the ground of commercial impracticability. Will the court agree? Why or why not?

Question 2

An independent contractor:
a. by law may not serve as an agent for the same employer
b. is not liable for torts committed in the course of employment c. may not make contracts on behalf of an employer
d. may not work more than one month in any year for one employer e. none of the other choices

Mochi · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

Commercial impracticability
The court pointed out that UCC 2-615 addresses the doctrine of commercial impracticability in the context of a sale of goods. The court stated that, for the failure of a sole source to excuse performance under this doctrine, the source must have been mutually contemplated by the parties as the sole source of supply and the failure must not have been foreseeable at the time of the contracting. It was clear that both parties knew GFI was Manley-Regan's sole source for the antimony oxide. The court concluded, however, that GFI's inability to obtain the chemical was foreseeable, in light of the known global shortage at the time that Manley-Regan and Rockland made their contract. Foreseeability is the key in commercial impracticality cases. The rationale for the rule that an occurrence must have been unforeseeable to discharge the seller from performance rests on the issue of assumption of risk of the source failing at the time of contracting. Under ordinary circumstances, the risk that the seller's supply might fail is on the seller because he promises to supply a product knowing the conditions of the market. . . . Where an unforeseen occurrence precludes the seller from performing, the law will excuse the seller from performing out of commercial impracticality.' The seller has no way of protecting itself . . . against unforeseen contingencies. However, when an occurrence that may preclude the seller from performing is foreseeable to the seller, he tacitly assumes the risk that the supply might fail. In this case, Manley Regan therefore bore the risk of its occurrence.

Answer to Question 2

e