Describe what is meant by contract discharge through commercial impracticability
What will be an ideal response?
The courts have sought to enlarge the grounds for discharge of a contract by adding the concept of commercial impracticability, defined as a situation in which performance is impracticable because of unreasonable expense, injury, or loss to one party. In effect, a situation that was not foreseeable, or the nonoccurrence of which was assumed at the time the contract was executed, in fact, occurs, making performance of the contract unreasonably expensive or injurious to a party. For example, a plastics manufacturer becomes extremely short of raw materials because of a war and an embargo on oil coming from the Middle East. The manufacturer's contracts with retailers for plastic goods will be discharged in most cases if the court finds that the manufacturer could not have anticipated the war and had no alternative source of materials costing above the same price.
You might also like to view...
Which of the following principles of ethical and moral leadership does sharing information as an open communicator relate best to?
a. acting in accordance with one’s own sense of values or principles pertaining to justice b. having integrity c. enforcing standards d. assuming personal accountability
In a statement of cash flows using the direct method, which of the following would increase reported cash flows from operating activities?
a. Dividends received from investments b. Gain on sale of equipment c. Gain on sale of a business segment d. Sale of treasury stock
Answer the following statements true (T) or false (F)
“Economic consequences” is not part of the conceptual framework.
Which ethical decision-making approach foster decisions made on moral principles that infringe as little as possible on the entitlements of others?
a. Justice approach b. Utilitarian approach c. Rights approach d. Objectivity approach