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Commercial Impracticability in Mineral Transactions

James T. Otis, Robert A. Creamer, Paul K. Whitsitt, Mine to Market: The Legal Issues (1985)

The modern doctrine of “commercial impracticability” is an invention of the Uniform Commercial Code, which was adopted in the 1960s in most of the United States. A copy of the Code provision, Section 2-615, together with “Official Comments” by the drafters is attached as Appendix 1. Basically, the doctrine is one which provides an excuse from performance to an otherwise defaulting party to a contract for the sale of goods, such excuse either to be total or partial, depending upon the facts of the case. The promisor must prove the necessary facts to bring himself within the elements of the doctrine to be excused from the bargain.

II. Development of the Doctrine.

A. Common Law Impossibility.

Early English common law recognized no excuse for non-performance of a contract: the promisor either performed, or if performance became impossible, responded to the promisee in damages. This rule was first relaxed in 1863 when the Queen's Bench released a lessor from his obligation to rent a music hall which had been destroyed by fire prior to the time for performance. Taylor v. Caldwell, 122 Eng.Rep. 309 (Q.B. 1863). The Taylor court read an implied condition into the contract that the music hall continue to exist until the time for performance. Failure of the condition made performance impossible and excused both parties from fulfilling their contractual obligati