1. Ch.5.B.3Frustration of Purpose1

3.  What is the contract’s subject?  Is it impossible for Henry to perform?  What does the court decide?  Was the risk of the cancellation of the coronation foreseeable?  Why not argue impracticability?  Can Krell be distinguished from Sub-Zero Freezer Co.? Ch.5.B.3Frustration of Purpose3

4. A party’s duty is discharged if 1. Principal purpose is substantially frustrated by occurrence of event after K is made 2. Non-occurrence of event was a basic assumption on which K was made 3. Neither party is at fault 4. Unless the language or the circumstances indicate the contrary. Rest. (2d) 265 Compare to Doctrine of Impracticability (*underlined language) Monday, November 7Impossibility & Frustration of Purpose 4

5.  What are the terms of the coal purchase contract?  If the market price for coal declines, does NIPSCO have any plausible claims to avoid its duty to buy coal?  What is the supervening event that might give rise to a plausible frustration of purpose claim?  When does the force majeure clause apply?  Which side has a better argument? Ch.5.B.3Frustration of Purpose5