Question

1. you have four choices below. In which choice would true impossibility NOT apply?

a. A record company contracted with Eartha to produce a CD of traditional gospel choir songs; unfortunately, Ertha died before recording began.

b. Finnly contracted with a local juice company to supply 10,000 pounds of Valencia oranges, but a tornado tore through her orange grove, completely destroying it.

c. None of these are correct.

d. Reed agrees to purchase an expensive piece of jewelry for $25,000; a week later, he tells the jeweler that he simply does not have that kind of money.

2. In his Oceanside, California basement, Bruno makes Budda Blast, a synthetic form of marijuana.

He signs a contract with Soooper Smoooke Shooop, a California corporation, to deliver 1,000 cans of Budda Blast for $10,000.

Subsequently, but before the delivery date, the California legislature passes and implements a law that makes the sale of Budda Blast illegal.

Bruno's contract will be discharged because of __________.

a. None of the above

b. commercial impracticability

c true impossibility

d. frustration of purpose

Answer 1

1. Answer: Reed agrees to purchase an expensive piece of jewelry for $25,000; a week later, he tells the jeweler that he simply does not have that kind of money.

Rationale: In this situation, true impossibility would not apply as Reed can still borrow the remaining amount to buy the jewelry after he agreed to purchase. It is not practically impossible to arrange $25,000.

In options a and b, true impossibility applies as Ertha cannot be brought back from the dead and the Finnly cannot supply 10,000 pounds because of the destruction of the orange grove.

2. Answer: Frustration of purpose

Rationale: Bruno's contract is discharged by an unanticipated situation due to the intervention of the Californian law. However, the performance of the contract is still possible but the law makes it illegal. These are factors that determine the defense of Frustration of purpose and they are:

• an event that Bruno and Soooper Smoooke Shooop didn't see coming.
• Bruno's performance is possible
• the legality of Bruno's product undermines the contract's purpose.

For true impossibility, the performance has to be impossible which is not the case here

Bruno's contract doesn't fall under commercially impractical as the performance of the contract is not extremely difficult or expensive due to an unanticipated event or circumstance. It is illegal because of the law.