Under frustration of purpose clause, a contract may be excused if the reason for entering the contract has been changed or has been invaluable. If the valuable part of the contract, for example a well known concert singer, has become ill, the contract may be excused due to the illness of the valuable part, the singer, of completing the contract.
Valid Contract: an agreement that contains all of the essential elements and meets all the requirements of a binding contract
Elements of a Contract:
1. There is an agreement between the parties
2. It must be supported by consideration
3. The parties must have legal capacity
4. The contract must be for a legal purpose
CISG Article 11: a contract for the international sale of goods “need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.”
Electronic Signatures in Global and National Commerce Act: makes an electronic signature on a contract as legally binding as a handwritten one on a paper document
The common law parol evidence rule states that a court may not consider in evidence any written or oral statements that were made by the parties prior to or at the time of concluding a fully integrated written contract if the statements are offered to contradict, vary, or add to the terms of the written contract.
The CISG provisions of Article 9 resemble the way trade usages are handled under American law. The only trade usages that can be used to interpret or fill in the gaps in a contract are those to which the parties have agreed or that they have established between themselves and those usages of which the parties knew or ought to have known, and that are widely known in international trade (or at least in those countries in which both buyer and seller are located) and regularly observed in the industry or trade involved.
Silence not acceptance is the general rule in most countries that the offeree’s silence or inactivity alone should not be interpreted as an acceptance.
A contract under the impossibility of performance may be excused only if the act of completing it is illegal, if a party of the contract is deceased, or if part of the contract has been destroyed.
Primary Responsibility of Buyer: to pay the price for the goods and take delivery at the time and in the manner promised
Primary Responsibility of Seller: deliver conforming goods in the manner specified and within the time called for in the contract
If it is important that foreign goods meet local standards or regulations, that should be clearly set out in the contract. The issue often turns on whether the seller knew the uses to which the goods would be put, whether it knew of the regulations in the buyer’s country affecting that use, or whether the buyer had relied on the seller’s knowledge and expertise
fundamental breach is a breach of contract committed by one of the parties that “results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.
In the case Delchi Carrier, SpA v. Rotorex, the Senior district judge ruled Rotorex breached its contract with Delchi by failing to supply 10,800 conforming compressors. The final decision was the plaintiff was awarded consequential damages for those expenses incurred in repairing the nonconforming goods and obtaining substitute goods, and for lost profits.
The impossibility of performance differs from the frustration of purpose in the form of in the impossibility of performance, the ACT in which the contract was made is deemed excusable and in the frustration of purpose, the REASON in which the contract was completed is deemed excusable