Question

Hardwoods, a timber supplying company, contracted with a furniture manufacturer, Taylor Furniture. Hardwoods owned a large plot of land
where it grew Oak and Beech trees. Taylor had contracted with Hardwoods to buy 1 ton of each type of lumber grown by Hardwoods each
month at a discounted price for the next 5 years. However, during the second year of the contract, and tornado Hardwoods farmland, and
demolished its entire supply of wood. Taylor having no other supplier sued Hardwoods for breach of contract. Hardwoods argued that their
contract had been legally discharged as soon as the tornado struck because at that point it was impossible for Hardwoods to supply lumber to
Taylor. The court ruled in favor of Hardwoods.


But what if the facts of the case were different? Select each set of facts below that could change the outcome of the case.

SELECT ALL THAT APPLY

A.Instead of a tornado’s striking Hardwoods’ land, the state in which Hardwoods operates passes a law making it illegal for any lumber
companies to cut down trees for the purposes of selling their wood. This environmental measure causes Hardwoods to go out of business.

B.Instead of demanding Oak and Beech wood grown specifically on Hardwoods’ land, Taylor requests shipments of Oak and Beech wood
from Hardwoods, and specifies in the contract that if Hardwoods cannot supply the wood, then Hardwoods should obtain the requested wood from another lumber supplier.

C.Instead of a tornado’s striking Hardwoods’ tree farm, a wildfire burns all of Hardwoods’ trees.

D.After the tornado, Hardwoods and Taylor Furniture agree to a novation, whereby a competing company, Oakempire, assumes the duties of
Hardwoods stated in the original contract.

Answer 1

Answer:B. Instead of requesting Oak and Beach wood grown specifically on Hardwood's Land Taylor request shipment of Oak and Beach wood from Hardwood, and specifies in the contract that if Hardwood cannot supply the wood then Hardwood should obtain the requested wood from another Lumber supplier.

C. After the Tornadoes Hardwood and Taylor agreed to a novation where a competing company, Oakempire assumes the duty of Hardwood stated in the original contract.

Explanation:

As regards B option of the answer, Taylor having put a clause in the contract requesting Hardwood to seek supply from another Lumber supplier if unable to meet the demand will make the contract binding on Hardwood

The entry into a novation with Oakempire after the Tornadoes makes the contract binding on Oakempire to deliver as stated in the contract for he has legally assumed the position of Hardwood.

The A and C options of the answer are still cases of contract frustration i.e the loss is beyond the control of the contracting parties , it's an act of God and insurer does not cover such. The first frustration is from new legislation and second is by natural disaster.