ABC Industries contracts to sell to CBA Industries 10,000 widgets a month for the next two years. A month after entering into the contract, a labor dispute between ABC and its employees arises and all production ceases. The contract between ABC and BCA is:

Question

Marilyn

Business

26 March, 17:05

ABC Industries contracts to sell to CBA Industries 10,000 widgets a month for the next two years. A month after entering into the contract, a labor dispute between ABC and its employees arises and all production ceases. The contract between ABC and BCA is:

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Answers (1)

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Amiya Stafford · Answer 1

Excused for frustration of purpose, commercial impracticability or impossibility of performance

Explanation:

Frustration of purpose implies a situation where the expected performance under the contract differs from actual performance due to unforeseen condition which hampers the intended performance.

Commercial impracticability means that from an economic perspective, the promise under the contract could not be fulfilled because it is economically impossible to do so, for instance ABC industries cannot begin to recruit new employees in order to fulfill CBA's order as it might be impossible to find employees that are good fit and even cost implication might be unbearable