Brief Fact Summary. Canadian Industrial Alcohol Co. (Plaintiff) sued Dunbar Molasses Co. (Defendant) for breach of an executory contract of purchase and sale. Defendant appeals from a judgment for the Plaintiff.
Synopsis of Rule of Law. Failure of a seller’s supplies does not amount to impossibility.
The inquiry is merely this, whether the continuance of a special group of circumstances appears from the terms of the contract, interpreted in the setting of the occasion, to have been a tacit or implied presupposition in the minds of the contracting parties, conditioning their belief in a continued obligation.View Full Point of Law
Issue. Whether the continuance of special circumstances appears from the terms of the contract to have been an assumption in the minds of the contracting parties conditioning their belief in a continued obligation?
Held. No. Judgment affirmed.
When a court believes that the risk was foreseeable and under the control of one of the parties, then the court will not relieve performance of that party due to impossibility. The Plaintiff was not made aware of the agreement between the Defendant and the Sugar Refinery. If they had been made aware it is likely that they would have contracted with the Sugar Refinery on its own. Further, the Defendant did not have time to nor did he procure a contract with the Sugar Refinery to supply sufficient for its needs. Therefore, the Defendant will not be relieved of performance and cannot use the defense of impossibility.
Discussion. This case demonstrates impossibility due to failure of third persons. When a middleman contracts to supply goods that he will be getting from a third party and the third party cannot supply the goods, the middleman may not use the impossibility defense if the seller is unwilling rather than unable to contract to sell the items to the seller.