Sales and Leases - A Problem-based Approach, 2016a

Alamance County Bd. of Educ. v. Bobby Murray Chevrolet, Inc.
465 S.E.2d 306 (N.C. App. 1996)
[Bobby Murray Chevrolet, an authorized dealer of General Motors products, agreed to sell 1,200
school bus chassis to the State of North Carolina. Unfortunately, Bobby Murray Chevrolet was
unable to obtain a sufficient number of chassis from General Motors. The purchaser covered by
buying the chassis elsewhere, and sued Bobby Murray Chevrolet for the added cost of
approximately $150,000. Bobby Murray Chevrolet argued that it was excused from its obligation
to deliver the chassis, because its sole source, General Motors, was unable to deliver the chassis
to Bobby Murray Chevrolet.]
Bobby Murray admits the bus chassis ordered by plaintiff school boards were never
delivered. However, Bobby Murray contends its lack of performance should be excused pursuant
to [§ 2-615] . . . .
Bobby Murray asserts two arguments based upon the foregoing statute. It contends the
failure of GM to supply the bus chassis was "a contingency the nonoccurrence of which" was a
basic assumption of the underlying contracts between Bobby Murray and plaintiffs. Second,
Bobby Murray claims governmental regulation [reducing emissions] after 1 January 1991 was an
intervening factor which should operate as an excuse. . . .
U.C.C. § 2-615 has its roots in the relatively recent common law doctrines of
impossibility of performance and frustration of purpose, which evolved from the original
common law rule that parties to a contract were to be held absolutely to its terms. Thomas R.
Hurst, Freedom of Contract in an Unstable Economy: Judicial Reallocation of Contractual Risks
Under U.C.C. Section 2-615, 54 N.C. L. Rev. 545, 549 (1976). The official comments to § 2-615
indicate that both doctrines were intended to be embraced within a U.C.C. concept denominated
"commercial impracticability." Id. at 554.
Commentators have asserted that the drafters of the U.C.C. intended "commercial
impracticability" to allow a more liberal standard in releasing promisors from contracts than the
common law had afforded, but have also noted that courts generally have declined to heed such
alleged intent. Paula Walter, Commercial Impracticability in Contracts, 61 St. John's L. Rev.
225, 227 (Winter 1987).
In order to be excused under § 2-615, a seller of goods must establish the following
elements:
(1) performance has become "impracticable";
(2) the impracticability was due to the occurrence of some contingency which the parties
expressly or impliedly agreed would discharge the promisor's duty to perform;
(3) the promisor did not assume the risk that the contingency would occur;
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