Is the plaintiff correct in its assertion (a) that its performance had become impracticable through unforeseen events and (b) that it is entitled to relief from performance? Explain.

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Is the plaintiff correct in its assertion (a) that its performance had become impracticable through unforeseen events and (b) that it is entitled to relief from performance? Explain.

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Plaintiff, a seller of milk, had for ten years bid on contracts to supply milk to defendant school district and had supplied milk to other school districts in the area. On June 15, plaintiff contracted to supply defendant’s requirements of milk for the next school year at a price of $0.0759 per half pint. The price of raw milk delivered from the farm had been for years controlled by the U.S. Department of Agriculture. On June 15, the department’s administrator for the New York-New Jersey area had mandated a price for raw milk of $8.03 per hundredweight. By December, the mandated price had been raised to $9.31 per hundredweight, an increase of nearly 20 percent. If required to complete deliveries at the contract price, plaintiff would lose $7,350.55 on its contract with defendant and would face similar losses on contracts with two other school districts. Is the plaintiff correct in its assertion (a) that its performance had become impracticable through unforeseen events and (b) that it is entitled to relief from performance? Explain.

Explanation & AnswerSolution by a verified expert

Explanation

Under the Uniform Commercial Code, only those contracts are regarded as non performable, which are actually impracticable. This does not only include inconvenience or financial incapability or increase in the price of the products; it includes more than these.
In this case, the seller has only one excuse to not perform the contract, which is an increase in price of milk. So, the relief from the contract performance is not going to be granted to the seller because the factor that affects the contract is controllable by the mutual consent of both parties.

Verified Answer

The milk seller is not right in stating both statements since this case states the excuse that the milk seller is unable to perform the contract due to an increase in the price of milk. So, this excuse is going to be analyzed under the provision of excuse for nonperformance.

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