Brief Fact Summary. Wegemeatic Corp. (Defendant) appeals from a judgment of the District Court in favor of the United States (Plaintiff). The court awarded the Plaintiff liquidated damages, increase in replacement products, and preparatory expenses for Defendant’s failure to deliver the contracted for product on time.
Synopsis of Rule of Law. Basic engineering difficulties, which prevent timely delivery does not constitute commercial impracticability that excuses performance.
However, the Negotiable Instruments Law has been enacted in every state of the Union, as well as in the District of Columbia; it is a source of federal law--however that phrase may be construed--more complete and more certain, than any other which can conceivably be drawn from those sources of general law to which we were accustomed to resort in the days of Swift v. Tyson.View Full Point of Law
Issue. Whether difficulties in engineering, which prevents timely delivery, constitute commercial impracticability excusing performance?
Held. No. Judgment is affirmed.
Commercial impracticability that would excuse performance does not include basic engineering difficulties that prevent timely delivery. If the court adopted Defendant’s argument that would mean that although a purchaser makes a binding choice because of the seller’s representation, the seller is free to express what are aspirations and take a chance on mere probabilities of fulfillment without any risk of liability. Instead Defendant could have limited his liability through exculpatory language but not by failing to follow through with his representations.
Defendant has shown that with additional time and money he could have developed the system. What did become impossible was delivery on time. Therefore, the evidence demonstrates that true impracticability is far from compelling and the Defendant cannot use the defense to excuse his performance.
Discussion. If an essential but intangible aspect of the contract becomes impossible, the contract may be discharged, just as where the subject matter was destroyed. If certain specifications are drawn up by the vendor and it turns out that the state of the art is not sufficient to enable the vendor to meet the specifications he is unlikely to be excused from performing.