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Citations:

Bluebook 21st ed.

Alphonse M. Squillante & Felice M. Congalton, Force Majeure, 80 COM. L.J. 4 (1975).

ALWD 6th ed.

Squillante, A. M.; Congalton, F. M., Force majeure, 80(1) Com. L.J. 4 (1975).

APA 7th ed.

Squillante, A. M., & Congalton, F. M. (1975). Force majeure. Commercial Law Journal,
80(1), 4-9.

Chicago 7th ed.

Alphonse M. Squillante; Felice M. Congalton, "Force Majeure," Commercial Law Journal
80, no. 1 (January 1975): 4-9

McGill Guide 9th ed.

Alphonse M Squillante & Felice M Congalton, "Force Majeure" (1975) 80:1 Com LJ 4.

AGLC 4th ed.

Alphonse M Squillante and Felice M Congalton, 'Force Majeure' (1975) 80(1) Commercial
Law Journal 4.

MLA 8th ed.

Squillante, Alphonse M., and Felice M. Congalton. "Force Majeure." Commercial Law
Journal, vol. 80, no. 1, January 1975, p. 4-9. HeinOnline.

OSCOLA 4th ed.

Alphonse M Squillante and Felice M Congalton, 'Force Majeure' (1975) 80 Com LJ 4

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 OBJECTIVES
COMMERCIAL To elevate the standard and improve the

LAW practice of Commercial Law.

To encourage an honorable course of dealing
among its members and in the

JOURNAL profession at large.

To promote uniformity of legislation in
matters affecting Commercial Law.
published monthly by the To foster among its members a feeling of
COMMERCIAL LAW LEAGUE OF AMERICA fraternity and mutual confidence.

Force Majeure

Alphonse M. Squillante
Dean, Pettit College of Law
Ohio Northern University, Ada
Felice M. Congalton
Membor of Iowa Bar

Introduction possible when there is a casualty to identified6 goods with-

1
FOBcE MAJEURE, or sometimes referred to as "irresisti- out the fault of either party to the contract. This particular
ble impulse," 2 is a term that is principally employed in in- section has been and can be reasonably read to include
surance contracts.a While the concept of force majeure has mishaps which are based upon the concept of force ma-
been principally utilized as an insurance contract term, it jeure.7 Obviously, the Code, through this section, does not
has ablo been acknowledged in many cases outside of the intend that avoidance by the seller of his contractual du-
insurance field 4 as a valid excuse for the non-performance ties is possible when he commits acts which are detrimen-
of otherwise enforceab!e contractual obligations. tal to his good faith obligation to perform.
The Uniform Commercial Code in §2-613 is a statu- Problems arising regarding this particular concept lie
tory enactment of the insurance principle of force majeure. n'.t with the recognition that the force majeure should
This section provides the seller with the means by which excuse performance of a contract but in determining what
he may avoid his contract performance. Such avoidance is constitutes, according to the party's intent, a force ma-

1. Force majeure is also referred to as: force magesture (Fogg passes to the buyer, or in a proper case under a 'no arrival,
v. Van Saun Coal Co., 12 N.J. Mies. 680, 174 A. 419 no sale' term (Section 2-324) then
(1934) ); guerza mayor (American Sur. Co. v. Batangan, (a) if the loss is total the contract is avoided; and
19 Phlippine 110 (1911) ); and vis major (Pacific Vege- (b) if the loss is partial or the goods have so deteriorated
table Oil Cor. v. C.S.T. Ltd., 29 Calif. 2d 228, 174 P. 2 a no longer to conform to the contract the buyer
44]. (1946) ). may nevertheless demand inspection and at his op-
2. BLACK'S LAw DICTIONARY, 774 (4th e. 1968). tion either treat the contract as avoided or accept the
3. Emteregion, TREATISE DEs ASSURANCES, eh. 12 (1800). goods with due allowance from the contract price for
4. E.g., Peterson v. Nools, 255 F. 875 (9th Cir. 1919) (held the deterioration or the deficiency in quantity but
no force majeure in award of contract damages). without further right against the seller."
5. Section 2-613 of the Uniform Commercial Code: 6.Identified goods are those which the parties to the contract
Casualty to Identified Goods. havw agreed are the subject matter of their contract or
"Where the contract requires for its performance goods wh'ch the Code permits an aggrieved party to so identify.
identified when the contract is made, and the goods suffer 7. Clifford v. Watts, 5 C.P. 577 (1870); J. Chitty, Contracts
casualty without fault of either party before the risk of loss 585 (1968).

COMMERCIAL LAW JOURNAL

jeures which will excuse performance of the party's con- The significance of the role of force majeure under the
tractual obligations. Consequently, the question arises as Uniform Commercial Code is that the concept can be in-
to whether or not the parties to a contract would be wise cluded under §1-103", unless specifically displaced by a
to include a provision therein which would specifically ex- provision of the Uniform Commercial Code. Paralleling the
cuse performance of the contract upon the happening of a development of force majeure l" is the standard insurance
circnstance beyond their control. 9 term of "Act of God." 1. 7 In any event, it would seem that
the Act of God standard is a term which is more limited in
Development of the Concept scope than the force majeure. 18 The excuse of non-perfor-
Approximately one hundred and fifty years ago the in- mance based upon Act of God is related to the law of com-
surance principle of force majeure was established in An- mon carriage19 and is now widely included as a standard
glo-American law. The development arose primarily with phrase in contracts of sale. However, absent an Act of God
the usages of the law merchant. 10 It has not been the usual clause, the general view seems to be that Acts of God are
practice of the common law courts to readily apply the con- those acts which are beyond the control of the parties and
cepts ofirresistible force as a term in and of itself having are not foreseeable events. Since they are not foreseeable
a legal meaning to common law contracts. Typically, the there is no requirement for making a contractual stipula-
English courts have chosen not to attempt to define the tion of those specific occurrences which would make per-
meaning of the term. 11 In one instance where the contract formance of the contract impossible.
was made subject to various force majeure conditions the A condition in the contract which excuses performance
court found that that particular phrase was so obscure as whether force majeure or Act of God may be included as a
to be incapable of any precise meaning. Because of the ob- basic assumption of the contract. All reasonable parties
scurity in the meaning of force majeure the court reasoned expect to perform on their contract unless some unusual in-
that the parties had no intention to be bound and therefore tervening circumstance prevents their performance. Force
no agreement was made between the parties with the con- majeure is presumed by the parties not to occur and if it
sequence that no contract was created. 12 Not unexpectedly, does the parties would reasonably expect that the contract
a Civil Code application to a common law system pro- would not be performed. In the event that a force majeure
duced a history of confusion in the application of the prin- occurs while the contract is still executory, the reasonable
ciple in common law cases.1 expectation of the parties is that the executory portion of
The term is a development of the drafters of the French the contract would be unperformable.20 The happening or
Civil Code. Section 1148 of the Code Napoleon provides: non-happening of an event upon which the contract's per-
formance is conditioned falls within the law of conditions.
There is no ground for damages and interest, when by Consequently, the enforceability or non-enforceability of
consequence of a superior force or of a fortuitous occur- the contract will depend upon the wording of the condi-
rence, the debtor has been prevented from giving or tion. The necessity for actually including the specific
doing that to which he has bound himself, or has done
14 terminology in the contract becomes apparent when one
that from which he was interdicted.
reasons that no party should be held to a term which is

8. The term has included: lightening-Pons y Compania v. La words which precede or follow it, and with a due regard to
Cornpania Maritime, 9 Philippine 125 (1907); power fail- the nature and general terms of the contract. The effect of
ures-Egham & Staines Elec. Co. v. Egham UDC, 1, All the clause may vary with each instrument. [1920] 2 K.B.
E.R. 107 (1944); drought-United States v. Lewis, 237 F. 714, 720.
80 (8th Cir. 1916); flash floods-Barnard-Crtiss Co. v. 14. Code Napoleon, By a Barrister of the Inner Temple, Clay-
U.S., 257 F.2d 565, (10th Cir., 1958); war-Pacific Vege- ton's Book Store, Baton Rouge, La. 1960, p. 314.
table Oil Corp., v. CST Ltd., 29 Calif. 2d 228, 174, P.2d 15. Section 1-103 of the Uniform Commercial Code:
441 (19'i6); riot-Overseas Metal & Ore Corp. v. Rosen- Supplementary General Principles of Law Applicable.
feld, 132 Conn. 364, 44 A.2d 625, (1945); earthquake- "Unless displaced by the particular provisions of this Act,
Fogg v. Van Satn Coal Co., 12 N.J. Misc. 680, 174 A. 419 the principles of law and equity, including the law mer-
(1934). chant and the law relative to capacity to contract, principal
9. The inclusion of a clause "subject to force majeure condi- and agent, estoppel, fraud, misrepresentation, duress, coer-
tions has been held to be so obscure as to be incapable of cion, mistake, bankruptcy, or other validating or invalidat-
any definite and precise meaning, leading the court to find ing cause shall supplement its provisions."
that there was no consensus ad idem and therefore no con- 16. Cf. Hays v. Kennedy, 41 Pa. 378, (1861) (terms easily
tract," Nicolene Ld. v. Simmonds, [1953] 1 Q.B. 543, confused).
British Electrical & Associated Industries (Cardiff) Ltd. v. 17. 6 A. Corbin, Contracts §1324 (1962) calls force majeure a
Patley Pressingv, Ltd., [1953] 1 All Eng. 94, 1 W.L.R. 28 catch-all phrase for "Act of God," now outmoded. Regard-
97 Sol. J. 96. less of label, both terms accommodate the precept that there
10. The law merchant is may exist an extra-terrestrial happehing that excuses the
[a] system of law not resting exclusively on the institu- non-performance of the party or parties without incurring
tions and local customs of any particular country, but liability.
consisting of certain principles of equity and usages of 18. E.g. Niblo v. Binesse, 44 Barb. 54 (N.Y. Sup. Ct. 1964).
trade which general convenience and a common sense of 19. See gen., 6 A. Corbin, CONTRACTS, §1324 (1962). See also,
fust;ce have established to regulate the dealings of mer- Note, The Development of the Doctrine of Impossibility of
chants. Bank of Conway v. Stacy, 51 N.D. 399, 200 N.W. Performance, 18 Mich. L. Rev. 58.9 (1920).
505 1924). 20. See 5 S.Williston, Contracts §661b (3d ed. 1961).
11. Matsoukis v. Priestman & Co., [1915] 1 K.B. 681. It is probable that the tendency of the law is toward an
12. Nicolene Ld. v. Simmonds, [1953] 1 Q.B. 543. enlargement of the defense of impossibility, and in any case
13. Lebeaupin v. Richard Crispin and Company, [1920] 2 KB where it may fairly be said that both parties assumed that
714. presents a good analysis of the confusion which has the performance of the contract would involve the contin-
surrounded the English development of the concept. The ued existence of a certain state of affairs, impossibility of
judge stated, "I take it that a 'force majeure' clause should performance due to a change in this condition of affairs
be construed in each case with a close attention to the should be an excuse.

JANUARY 1975 ....

not expressed in the contract and certainly should not be Uniform Commercial Code, Sections 2-613 and
excused from performing upon the contract due to the 2-615
supervening event which has not been expressly provided Several hypotheses must be examined in order to arrive
for in the contract. 2 t Peculiar happenings occur when one at and make a determination of the applicability of the
or both of the parties to a contract promise to perform on Code's provisions regarding impossibility of performance.
that contract even though it is impossible for them to per- Whether or not certain contractual conditions established
form. In one instance, 22 it was held that a contracting par- by the parties to the contract are capable of being per-
ty is not excused from performing on his contract even formed or the performance is rendered impossible by
upon the occurrence of a supervening event if such event is some supervening event is a question of fact. In arriving
not expressly provided for in the contract. In this case, the at any conclusions concerning the impossibility of perform-
defendant's contractual obligations were enforced despite ing one's contractual obligations one must give consider-
the fact that he had been expelled from his dwelling there- ation to the means by which the goods were destroyed.
by receiving no benefit from his tenancy agreement. Such How the goods are destroyed and what causes the de-
a rationale has even been supported into the Twentieth struction is important. The answer to these particular
Century where modern courts have enforced the rule of questions has significance in that the act of destruction
absolute contracts notwithstanding provisions as to the may or may not have been provided for in the excuse
impossibility of performance. 23 The harshness of this rule clause of the agreement. 31 In the absence of such an
has led other jurisdictions to avoid it through a variety of exculpatory clause the event preventing performance may
mental gymnastics. Following the leading case for avoid- or may not constitute a force majeure. 32 Lastly, the act
ance 2 those courts which seek to avoid the harsh results itself may have been a foreseeable event. In the event
of the Paradine v. Jane case have implied a condition in that it was foreseeable, though inevitable, it is still subject
the contract that the parties to the contract intend that the to the defense that the parties should have provided for
subject matter of the obligations continue in existence for the possibility of its occurrence. 33 Like a startling contrac-
the executory interval of the contract.2 5 This particular tual innovation, to insist that any event which could render
theory poses a question of fact for the courts as to the fore- the contract impossible to perform, but which event is
seeability of the event itself26 and gives rise to the rules of forseeable, means that the parties should have provided
34
supervening impossibility.27 Similarly, the doctrine of com, for that event in the contract.
mercial frustration 2s requires that the court determine The second factual question which must be asked aside
whether the enforcement of the obligations as written in from the applicability of the Code to force majeure is the
the contract will compel a radical change in contractual time that the destruction of the goods occurred. Under the
obligations. The even broader standard of commercial im- Uniform Commercial Code §2-613, any excuse of per-
practicability29 has been adopted by the drafters of the formance which is due to the casualty of goods applies
Uniform Commercial Code.30 only to identified goods and is available only before there

21. The Ship B.L. Harriman v. Joseph Emerick, 9 Wall. 161, 29. See Mineral Park Land Co. v. Howard, 172 Calif. 289, 156
172, 19 L.Ed. 629, 633 (1870). See gen., Smith, SOME P. 458 (1916); Restatement of Contracts §454 (1932).
PIACTICAL ASPECTS OF THE DocTRINE OF IMPOSSIBILITY, 32 30. UCC §2 -615(a) (1972). See gen., Note, Performance-
Ill. L. Rev. 672 (1938). The Doctrine of Impossibility, 105 U. Pa. L. Rev. 836
22. Paradine v. Jane, 82 Eng. Rep. 519 (K.B. 1647). (1957).
23. E.g., United States v. Huff, 165 F.2d 720 (5th Cir. 1948); 31. Pre-Code case law tended to narrowly construe excuse
Wills v. Shockley, 52 Del. 295, 157 A.2d 252 (1960). See clauses. The attitude appeared to be that if some excuses
also Broderick Wood Products Co. v. United States, 195 were specifically delineated in the contract, the parties in-
F.2d 433 (10th Cir. 1952) wherein the Court held that: tended that only the delineated contingencies were to pro-
[it] is well settled that where one voluntarily enters into vide an excuse. See, e.g. Thaddeus Davids Co. v. Hoffman-
a positive agreement binding himself absolutely to per- La Roche Chemical Works, 178 App. Div. 855, 166 N.Y.S.
Form a lawful and possible act within a specified time, he 179 (N.Y. Sup. Ct. 1917).
is not relieved of that duty or absolved from liability for
failure to fulfill the covenant by a subsequent impossibil- 32. See, Companhia de Nauegacao Lloyd Brasilerio v. G. C.
ity of performance caused by an Act of God. Blake Co., 34 F.2d 616, 619 (2d Cir. 1929), wherein Judge
24. Taylor v. Caldwell, 122 Eng. Rep. 309 (Q.B. 1863). Learned Hand stated, "A promise involves risks that the
25. Dahl v. Nelson, Donkin & Co., 6 App. Cas. 58 (Q.B. 1881) promisor may find burdensome or impossible to meet. Its
provided: very purpose is to give assurance to the promisee against
When the parties to a mercantile contract . . . have not the hazards of the future. The promisor by undertaking
cexpressed their intentions in a particular event, but have these pro tanto relieves the promissee, and it is in the end a
left these to implication, a Court of Law, in order to as- question of how unexpected at the time was the event
certain the implied meaning of the contract, must assume which prevented performance".
that the parties intended to stipulate for that which is 33. Security Sewage Equipment Co. v. McFerren, 14 Ohio So.
fair and reasonable having regard to their mutual inter- 2d 251, 237 N.E. 2d 898 (1968), holding "Where one con-
ests and to the main objects of the contract. tracts to render a performance for which government ap-
Sec also Haley v. Van Lierop, 64 F.Supp. 114 (W.D. Mich. proval is required, he assumes the duty of obtaining such,
1945); Pearce-Young-Angel Co. v. Charles E. Allen, Inc., and the risk of its refusal is on him". Deardorff-Jackson Co.
50 S.E. 698 (S.C. 1948); Snipes Mountain Co. v. Benz v. National Produce Distributors Inc., 26 A D 1309, 4
Bros. & Co., 298 P. 714 (Wash. 1931). U.C,C. Rep. Serv. 1164 (O.S.D.A. 1967).
26. J. Chitty, CONTRACTS, ch. 22 at 588 (1968). 34. See, Madeirense Do Brasil S/A M. Stulman Emerick Lum-
27. See gen., Note, Impossibility and the Doctrine of Frustra- ber Co. 147 F.2d 399 (2d Cir. 1945) holding that a seller
tion of the Commercial Obect, 34 Yale L.J. 91 (1924); could not claim the defense of "force majeure" for failing to
Note, The Development of the Doctrine of Impossibility of deliver due to a shortage of ships where the seller was
Performance, 18 Mich. L. Rev. 589 (1920). aware of a shortage at the time of contracting, and there
28. A concept acknowledged by the drafters in UCC §2-615, was no "startling change" in conditions at the time perfor-
con iment 9. mance should have been rendered.

COMMERCIAL LAW JOURNAL

is a transfer of the risk of loss in those goods. 5 In order for the contract terms impossible, the Code implies such an
the p-ovisions of the Code to become applicable in the intent in order that the underlying philosophy of the Code
event of the destruction of the contract goods the event be met, that is, that all contracts must be performed. If per-
must have occurred prior to or concurrent with the agree- formable then the contract would be enforceable. Obvi-
ment of the parties. Additionally, some consideration must ously, if there is an express force majeure clause within the
be given to what portion of the subject matter of the con- contract then such an inference is unnecessary.
tract has been affected. If a substantial portion of the goods The limitat'ons regarding the practical utility of §2-613
have been affected by a casualty then §2-613(b) would are reasonably apparent and should always be within the
go\,ern.1 6 Should the loss of goods which are the subject consideration of the parties at the time that they create
matter of the contract be a total one, then the contract is their contract. Thus, the parties to the contract should al-
avoided." 7 If the loss of the contract goods is partial; then ways be cognizant of the fact that identification of the con-
the buyer has the option either to treat the contract as tract goods must occur and that transfer of risk of loss must
void :3s or accept the goods with an allowance against the not have occurred prior to the destruction of the subject
contract price,: 9 or to compel the performance of any al- matter of the contract. In the event that the intent of the
ternative provisions in the contract which 40may have pro- parties is not readily apparent upon a reading of the coi-
vided for a casualty to the particular goods. tract in those matters concerning impossibility of a per-
In order for the performance of one of the parties to a formance thereby leading the parties to make no provision
contract to be excused due to the impossibility provision of for a force majeure then it would seem that parol evidence
§2-613 of the Uniform Commercial Code the following may be admitted to prove the foreseeability of the destruc-
prerequisites must be in existence: first, the goods must be tive event. 46 The requirement of proof of foreseeability is
identified to the contract 41 ; second, the goods must have to permit the claiming party to show and prove that the
been destroyed without the fault of either party4 2 ; third, casualty could not have been prevented by prudence, dili-
the destruction of the goods which are the subject matter gence or due care. Accompanying this necessity of proof
of the contract must have occurred prior to the transfer of must be a show of evidence that the force majeure was in
the risk of loss to the other party43 ; and, fourth, an im- fact the direct cause of the seller's inability to perform ac-
plied condition of the existence of the goods of which the cording to the contract terms.
parties have made an agreement and have identified to the Under §2-615, an excuse which is grounded upon im-
contract should be apparent. 44 These four prerequisites practicability4 7 is made expressly subject to the obligations
would seem to coordinate and make current the theory of which are actually assumed by the parties to the contract.
absolute contract law as it existed at common law times There is no reason why the excuse which is provided by
with the liberality of contract performance and creation the Code in §2-615 cannot be waived by an appropriate
which is encouraged by the drafters of the Code. 45 The ag:eement of the parties in the contract.48 Once again,
fourth prerequisite imposes an intent upon the parties as there is a problem of proof here. The party seeking to
to the existence of the goods at the time of the creation of prove the intent of the contracting parties at the time of
the contract. In spite of the fact that the parties at the time the creation of the contract is faced with the same difficul-
of the creation of the contract assume nothing at all re- ties in scope of proof as those who must prove implied
garding the contingency which has made performance of conditions at common law. The rules established at corn-

35. UCC §2-613, comment 2: 39. Id.

"The section applies whether the goods were already de- 40. 6. A. Corbin, CONTRACTS, §1330 (1952).
stroyed at the time of contracting without the knowledge of 41. For the manner of identification see UCC §2-501. Identified
either party or whether they are destroyed subsequently but goods may act as an indication of existence for performance
before the risk of loss passes to the buyer. Where under the purposes under the contract.
ag-eement, including of course usage of trade, the risk has 42. UCC §2-613.
passed to the buyer before the casualty, the section has no 43. Risk of loss, see UCC §2-509 and 2-510.
application. Beyond this, the essential question in determin- 44. UCC §2-615, comment 1.
ing whether the rules of this section are to be applied is "This section excuses a seller from timely delivery of
whether the seller has or has not undertaken the responsi- goods contracted for, where his performance has become
bility for the continued existence of the goods in proper commercially impracticable because of unforeseen super-
condition through the time of agreed or expected delivery." vening circumstances not within the contemplation of the
36. U.C.C. §2-613(b) provides: parties at the time of contracting. The destruction of spe-
". if the loss is partial or the goods have so deteriorated cific goods and the problem of the use of substituted per-
as no longer to conform to the contract the buyer may nev- fornance on points other than delay or quantity, treated
ertheless demand inspection and at his option either treat elsewhere in this Article, must be distinguished from the
the contract as avoided or accept the goods with due allow- matter covered by this section."
ance from the contract price for the deterioration or the de- 45. UCC §1-102.
ficiency in quantity but without further right against the 46. UCC §2-202.
seller." 47. UCC §2-615. It should be noted that this section is read in
37. E.g., International Paper Co. v. Rockefeller, 161 App. Div. light of the section that succeeds it which regulates the pro-
180, 146 N.Y.S. 371 (N.Y. Sup. Ct. 1914). cedure after notice of excuse is given to the buyer.
38. UCC §2-613(b). 48. UCC §1-102(3).

JANUARY 1975
mon law regarding the foresecability4 9 of an event are still tracts which are governed by the Code in otler jurisdic-
operative since §2-615 fails to enumerate the contingen- tons than Mississippi.
cies acting as excuses for nonperformance. Where a cas-
ualty has occurred, the occurrence creates in the parties
both a subjective and objective impossibility of perfor- Drafting.
mance, In the subjective sense the casualty may very well Those parties to a contract who may wish to guard
have created in the mind of the party affected a series of against any contingency which may affect the performance
excuses which he feels is sufficient to prevent him from per- of their contract may so guard by taking an affirmative step
forming or permit him to cancel continued performance. to prevent their destruction of the goods5 ; or by taking
However, it is only the objective impossibility which re- sufficient precautions to make sure of the availability of
lieves the promissor of his contractual obligations, not the substitute performance or upon the happening of certain
subjective. Obviously, to permit the subjective intent of conditions to make sure that they comply with §2-61452;
the promissor to form the basis upon which a determina- or the parties may simply include in their contract the
tion as to whether to continue performance or not would clause which would excuse all executory portions of that
be to create in that promissor the possibility of whimsical contract in the event that a casualty has happened to the
adherence to the contract rather than absolute certainty of goods. From the viewpoint of the promissor, that clause
performance. which would excuse all executory performance in the event
of a casualty is probably that which is most commercially
expedient. However, the parties to a contract should not
Statutory Modification to the Official Code include it in their contract merely for expediency's sake
Mississippi has modified the adopted version of the Uni- when other alternatives are available and are reasonable to
form Commercial Code by including in its version of the the particular circumstances surrounding the creation of
Code a new section entitled "Force Majeure". This new their contract.
section provides: Section 2-61.5 does not catalog contingencies which
would excuse performance of the parties. Because this
Deliveries may be suspended by either party in case section neglects to index such excuses there is created a
of Act of God, war, riots, fire, explosion, flood, strike,
necessity which the parties must recognize in the creation
lock-out, injunction, inability to obtain fuel, power,
of any agreement in that they must provide, perhaps
raw materials, labor, containers, or transportation facil-
ities, accidents, breakage of machinery or apparatus, through foresight, against those happenings which could
national defense requirements, or any cause beyond prevent the performance of their contract. Unenumerated
the control of such party, preventing the manufacture, supervening events may excuse only timely delivery. In
shipment, acceptance, or consumption of a shipment of this instance, performance must be tendered despite in-
the goods or of a material upon which the manufacture convenience or added costs. 53 Unless the parties to the
of the goods is dependent. If, because of any such contract expressly agree to the contract the interpretations
circumstance, seller is unable to supply the total demand of the wording of the provisions of the contract must be
for the goods, seller may allocate its available supply that delay alone is excusable.5 4 If the parties intend that
,among itself and all of its customers, including those delay is to be treated as being permanently injurious
not under contract, in an equitable manner. Such deliv-
to the essence of their contract then such intentions
ery s(suspended shall be cancelled without liability, but
50 should be specifically stated within the contract. In
the contracts shall otherwise remain unaffected.
addition to making provision for excusing performance
Whilo this provision is of direct relationship only to in the event of some unforeseen and specified happening,
those contracts which are governed under the Mississippi the parties to the contract should also contemplate just
Uniform Commercial Code the provisions within this par- how and through what source the performance should
ticular section have a special relevance as a guide to any arise. Contract clauses that provide for substitute perfor-
draftsmen of specific excuse provisions for specific con- mance in the event that an alternate source of supply oth-

49. UCC §2-615, comment 8: light of mercantile sense and reason, for this section itself
"The provisions of this section are made subject to as- sets up the commercial standard for normal and reasonable
sumption of greater liability by agreement and such agree- interpretation and provides a minimum beyond which
ment is to be found not only in the expressed terms of the agreement may not go.
contract but in the circumstances surrounding the contract- "Agreement can also be made in regard to the conse-
ing, in trade usage and the like. Thus the exemptions of this quences of exemption as laid down in paragraphs (b) and
section do not apply when the contingency in question is (c) and the next section on procedure on notice claiming
sufficiently foreshadowed at the time of contracting to be excuse.
included among the business risks which are fairly to be re- 50. Miss. U.C.C. §75-2-617.
garded as part of the dickered terms, either consciously or 51. Canadian Industrial Alcohol Co. v. Dunbar Molasses Co.,
as a matter of reasonable, commercial interpretation from 258 N.Y. 194, 179 N.E. 383 (1932); Washington Mfg. Co.
the circumstances. (See Madeirense Do Brasil, S.A. v. Stul- v. Midland Lumber Co., 113 Wash. 593, 194 P. 777
man-Emrick Lumber Co., 147 F.2d 399 (C.C. A., 2 Cir., (1921).
1945) ). The exemption otherwise present through usage of 52. UCC §2-614 provides that there may be substituted per-
trade under the present section may also be expressly ne- formance of the contract upon the failure of any of the car-
gated by the language of the agreement. Generally, express rier or facilities provisions of the contract.
agreements as to exemptions designed to enlarge upon or 53. UCC §2 -6 15 (a).
supplant the provisions of this section are to be read in the 54. 1 R. A. Anderson, UCC 308 (1961).

COMMERCIAL LAW JOURNAL

er than the one originally contemplated are perfectly prop- tract draftsmen should clearly delineate whether excuse of
er and is an additional defense against a contract being performance or substitute performance is contemplated
unenforceable because of some force majeure. 55 Where the where the occurrence of an enumerated hazard makes per-
contract does make provision for substitute performance by formance impossible or impracticable. In drafting excuse
the tender of some lesser quantity of the contract goods clauses it is the wise draftsman that will recognize that
upon the casualty or other destruction of the entire lot of courts have traditionally construed such clauses narrowly.
goods contemplated by the parties that substitute perfor- It is important that the draftsman be complete in his draft-
mance will excuse complete performance. 5 6 The rationale ing the contingencies which will excuse performance.
is simple, obviously, if the contract provides for a lesser
amount to be delivered in the event of a casualty, the con- Variations on Clause Construction
tracting parties both intended that a lesser amount should Variation I
be sufficient to fulfill their contractual obligations. In order
for substitute performance to be enforceable, that which The promissor may assume absolute liability for non-per-
is destroyed must be essential to the performance even formance with a contract statement that specifically deline-
though it may not be the agreed upon contract goods.5 7 ates those factors which will not excuse his performance:
In any of the above circumstances, proper notice of fail- The seller hereby assumes absolute liability for per-
ure to perform is a prerequisite to the parties being able to formance of the above mentioned obligations and may
provide substantial substituted performance. Section 2- not employ as grounds for excuse of non-performance
615(c) requires that the seller notify the buyer seasonably the following...
of any delay or non-delivery and in a case where an alloca-
With this particular clause the parties may add specific
tion is required, the seller must estimate and notify the
circumstances under which the promissor gives assurance
buyer of the estimated quota available to that particular
of his performance regardless of the supervening happen-
buyer. Under the common law an excuse clause was an
ing that would otherwise render his performance impossi-
obvious necessity. Any rule of contract law that called for ble or impracticable.
absolute performance without regard to any supervening
events was bound to have a harsh result without such an Variation 2
excuse clause. Under the Code the emphasis has been A second variation other than one for absolute liability
placed less upon the foreseeabiity of such an event and might be drafted as follows:
more upon excusing performance in certain kinds of sit-
uations. A stipulation or provision in the contract regarding The seller is excluded from the right to claim excuse
supervening impossibility may not be so strictly construed for non-performance by any supervening circumstances
under the Code so as to work an unjust result. In: some whatsoever. However, the Uniform Commercial Code
jurisdictions the implied understanding of the parties may §2-613 shall govern the parties' obligations as to de-
layed delivery.
be sufficient. However, most draftsmen include as a pre-
cautionary measure clauses in their contracts against such
Variation 3
casualty losses. Since the parties to the contract may se-
lect their own remedies, such contracts which are drafted The promissor in this particular variation may provide
with a provision against casualty losses or excuse clauses, for excuse only in certain stated circumstances. Thus, such
there is no reason under the Code to make such clauses a clause can be drafted as follows:
inoperable or void. 58
The seller shall not be liable for failure to deliver any
There has been little case law interpreting the provision
(or all) of the above mentioned goods should the failure
of §2-615. Perhaps it is the strength of the Codes lan- to deliver result from (1) strikes, (2) floods, (3) et
guage in that particular section which accounts for the lack cetera.60
of case law. On the other hand, the vagueness of the lan-
guage provides little guidance to a court which must de- Variation4
termine what constitutes an event which makes perfor- Should the parties to the contract wish to avoid the
mance "impracticable by the occurrence of a contingency somewhat harsh clauses as set forth in the first three varia-
the non-occurrence of which was a basic assumption on tions, there is a liberal clause which could be drafted as
which the contract was made". 59 It is not unlikely as the follows:
case law arises under this particular section that there will
be a significant lack of uniformity in the application of this The promissor is excused from non-performance of any
and all contractual obligations in the event that his
section. Perhaps the best guard against such possible cha-
performance is hindered by some supervening force
otic case development would be to enumerate in all con- not procured by his own hand and not foreseeable at
tracts all those foreseeable hazards man-made or otherwise the time of the making of the contract.
and provide against those contingencies. Further, the con- (Continuedon page 43)

See Davis Co. v. Hoffman-LaRoche Chem. Works, 178 App. Co., 384 U.C. 394 (1966); United States v. Carlo Bianchi
Div. 855, 146 N.Y.S. 179 (N.Y. Sup. Ct. 1914). & Co., 373 U.S. 709 (1963).
Low's Ezy-Fry Potato Co. v. J. A. Wood, 26 App. Div. 583, 59. UCC §2-615(a).
4 U.C.C. Rep. Serv. 483 (1967). 60. In making a determination which specific contingencies
1 R. A. Anderson, UCC 311 (1961). should be included in the contract the draftsmen may find
See United States v. Anthony Grace & Sons, Inc., 384 U.S. it enlightening to review Miss. Code §75-2-617 mentioned
422 (1966); United States v. Utah Construction & Mining supra.

JANUARY 1975