Brief Fact Summary. One party agreed to repair and protect a dam for another party. The party doing the repairs was obligated to procure the necessary rock to make the repairs at a certain site. That rocks in this site proved to be incompatible with the project and another site was chosen. However, it proved impossible to get the rock from that site to the dam site.
Synopsis of Rule of Law. Pursuant to the doctrine of commercial impracticability, a contracting party is "discharged from his contract obligations, even if it is technically possible to perform them, if the costs of performance would be so disproportionate to that reasonably contemplated by the parties as to make the contract totally impractical in a commercial sense."
Issue. Was the amended contract impossible of performance?
• Or, can the obligation to be performed be excused due to commercial impracticablity?
Held. The September 27, 1966 agreement required that the rock be transported "across Cooper Lake to the dam site when such lake is frozen to a sufficient depth to permit heavy vehicle traffic thereon". Based on this language, the parties thought that the rocks would be transported over the ice by truck. The court agrees with the trial court that the Appellant's attempts over a two year period to move the rock over the ice, culminating in the death of two truck drivers, made performance of the contract impossible.
• The court observed "the parties contemplated that the rock would be hauled by truck once the ice froze to a sufficient depth to support the weight of the vehicles. The specification of this particular method of performance presupposed the existence of ice frozen to the requisite depth. Since this expectation of the parties was never fulfilled, and since the provisions relating to the means of performance was clearly material, Northern's duty to perform was discharged by reason of impossibility."
• The court then discusses the doctrine of commercial impracticability. A contracting party is "discharged from his contract obligations, even if it is technically possible to perform them, if the costs of performance would be so disproportionate to that reasonably contemplated by the parties as to make the contract totally impractical in a commercial sense." Additionally, serious risk to health or life will excuse performance.
• The court cites Professor Williston's views on impossibility: "The true distinction is not between difficulty and impossibility. As has been seen, a man may contract to do what is impossible, as well as what is difficult. The important question is whether an unanticipated circumstance, the risk of which should not fairly be thrown upon the promisor, has made performance of the promise vitally different from what was reasonably to be expected."
Discussion. This case is very interesting to read alongside [American Trading and Production Corp. v. Shell Int'l Marine LTD] to see how two courts examine the doctrines of impossibility and commercial impracticability.