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Question 1

What are the elements of impossibility?

Answer 1

• identified goods

- risk of loss

Question 2

What does “identified goods” mean?

Answer 2

The subject matter of the contract must be specifically identified

Question 3

What is casualty to identified goods?

Answer 3

Specifically considered goods in a contract get destroyed. Ie: I agreed to buy your golf clubs, but they get wrecked. If instead I ordered clubs from a company, no specific ones are identified, so they don’t become identified goods until the company ships them, or tags them to identify them as yours

Question 4

How does risk of loss work in face-to-face transactions?

Answer 4

• seller is merchant: buyer must get physical possession for risk to pass
• seller is nonmerchant: seller must tender delivery of goods (make them available for a reasonable time with notice of their availability) for risk to pass

Question 5

If you buy a computer, and tell them you will come back in an hour to pick it up, but the store burns down, who owned the item and had the risk of loss?

Answer 5

The store still owned it because you weren’t in physical possession and the seller was a merchant, so your duties are discharged

Question 6

If you made an agreement to sell someone your laptop, and tell the guy to pick it up on Saturday afternoon, but your apartment burns down Saturday night, who has the risk of loss?

Answer 6

Because the seller is not a merchant, the risk of loss is on the buyer because the goods were available to him for a reasonable time with notice of their availability and the seller completed his duty

Question 7

What are the three views on risk of loss for damage to property?

Answer 7

• majority: risk is on buyer because once the contract is made, he is the owner
• minority: risk is on the seller
• UVPRA: risk is on the buyer that is in possession or has legal title

Question 8

What is impracticability?

Answer 8

Performance of an obligation is not impossible, but is extremely difficult or risky and contingency was unforeseeable

Question 9

What are the possible responses to impracticability?

Answer 9

• can terminate and discharge the contract, or

- modify it with a substitution

Question 10

To have impracticability, you need what?

Answer 10

Extreme or unreasonable difficulty, expense, injury or loss, etc.

Question 11

Are small increases in expense of performance considered impracticability?

Answer 11

No, because a party assumes the risk of increase within a normal range.

But severe shortages, crop failure, or unforeseen shut downs that cause a large increase in price can be impracticability.

Question 12

If an event or condition existed at the time of formation, but the party didn’t know or couldn’t have known, can impracticability still discharge the duty?

Answer 12

Yes

Question 13

What are the two views on failure of contemplated mode of performance?

Answer 13

• Common Law: doesn’t matter if just minor like mode of delivery, then can make a commercially reasonable substitute, but if central to the contract, no substitute
• UCC: if means/manner of payment fails, seller can withhold or stop delivery unless buyer gives a payment that is substantially equivalent

Question 14

What happens if performance is only partially impracticable?

Answer 14

• CL: the rest of performance that isn’t more difficult must be performed, and the other party must accept it with an appropriate offset
• R2: must find a substitute and substantially perform the rest of the contract

Question 15

If a contractor agrees to build a house using a certain kind of pipe, but that product goes out of business, what is his duty?

Answer 15

His duty to use that kind of pipe is excused, but he still has a duty to build a house and use a substituted pipe, and the owner must pay for the house subject to offset for the change in pipe

Question 16

If either party had already given part performance before circumstances caused impracticability, what can a party get?

Answer 16

Restitution of the reasonable value of his performance, and if any party relies, he can get reliance damages as justice requires

Question 17

What are the two types of technological impracticability?

Answer 17

• technological breakthroughs

- unforeseen possibilities

Question 18

If a contract is made to make a new product or use a new process, but existing technology makes that impossible, what is the result?

Answer 18

Contractor assumed the risk because he knew the limits of existing technology

Question 19

What are the elements to prove impracticability under the UCC?

Answer 19

• event changed the basic assumption of both parties
• event made performance impossible or impracticable (need extreme unreasonable difficulty)
• party using the defense didn’t assume the risk

Question 20

If impracticability was present when an agreement was made, what must the party show in order to prove impracticability?

Answer 20

That he didn’t have reason to know the facts (if he did have knowledge, that would create an assumption of the risk)

Question 21

If grasshoppers eat your crop, are you excused for contracts that specifically call for your crop?

Answer 21

Yes, but if the contract doesn’t specify your crop, and just states the item, then destruction of your crop is not an excuse for nonperformance. Same for factory cases making specific items