Plaintiff, a seller of milk, had for ten years bid on contracts to supply milk to defendant school district and had supplied milk to other school districts in the area. On June 15, plaintiff contracted to supply defendant’s requirements of milk for the next school year at a price of $0.0759 per half pint. The price of raw milk delivered from the farm had been for years controlled by the U.S. Department of Agriculture. On June 15, the department’s administrator for the New York-New Jersey area had mandated a price for raw milk of $8.03 per hundredweight. By December, the mandated price had been raised to $9.31 per hundredweight, an increase of nearly 20 percent. If required to complete deliveries at the contract price, plaintiff would lose $7,350.55 on its contract with defendant and would face similar losses on contracts with two other school districts. Is the plaintiff correct in its assertion (a) that its performance had become impracticable through unforeseen events and (b) that it is entitled to relief from performance? Explain.
Plaintiff, a seller of milk, had for ten years bid on contracts to supply milk to defendant school district and had supplied milk to other school districts in the area. On June 15, plaintiff contracted to supply defendant’s requirements of milk for the next school year at a price of $0.0759 per half pint. The price of raw milk delivered from the farm had been for years controlled by the U.S. Department of Agriculture. On June 15, the department’s administrator for the New York-New Jersey area had mandated a price for raw milk of $8.03 per hundredweight. By December, the mandated price had been raised to $9.31 per hundredweight, an increase of nearly
20 percent. If required to complete deliveries at the contract price, plaintiff would lose $7,350.55 on its contract with defendant and would face similar losses on contracts with two other school districts. Is the plaintiff correct in its assertion (a) that its performance had become impracticable through unforeseen events and (b) that it is entitled to relief from performance? Explain.
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