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Lawrance v. Elmore Bean Warehouse, Inc

    Brief Fact Summary. Elmore Bean Warehouse, Inc., (Appellant), appeals a judgment by the district court denying relief from the terms of its contract with Lawrance on the grounds of commercial impracticability.

    Synopsis of Rule of Law. In order to prove commercial impracticability, a buyer must show it can operate only at a loss and the loss will be so severe and unreasonable that failure to excuse performance would result in a grave injustice.

    Facts. Appellant contracted to purchase pinto beans from Appellee, a grower. The market price dropped dramatically below the contract price. Appellant paid only 15% of the contract price and Appellee filed suit for the remainder.

    Issue. Whether a buyer can claim commercial impracticability to excuse him from a contract because of a drop in the market price.

    Held. No. Mere market shifts do not usually discharge performance.

    Discussion. It appears that Appellant risked a change in the market price by signing to buy the beans at a fixed price. Virtually all contracts based on a fixed price could be subject to modification if a change in the market occurred. Allowing a buyer to claim commercial impracticability in these cases would invite countless lawsuits. Therefore, buyers must show that they can operate only at a loss and the loss will be so severe and unreasonable that failure to excuse performance could result in a grave injustice. Mere market shifts, or financial inability do not usually discharge performance.


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