Phrased in these terms, the issue is sometimes regarded as a matter of excuse from performance, apart from the contract, rather than being treated as an implied condition for performance derived from the contractual arrangements between the parties. Generally, however, the excuse of impossibility of performance is limited to the destruction of the means of performance by an act of God, vis major, or by law ( International Paper Co. v. Rockefeller, 161 App. Div. 180, 184; 6 Williston, Contracts [Rev. ed.], § 1935; 10 N.Y. Jur., Contracts, § 357; Restatement, Contracts, § 457). Thus, where impossibility or difficulty of performance is occasioned only by financial difficulty or economic hardship, even to the extent of insolvency or bankruptcy, performance of a contract is not excused ( Central Trust Co. v. Chicago Auditorium, 240 U.S. 581; Cameron-Hawn Realty Co. v. City of Albany, 207 N.Y. 377, 380-381; Updike v. Oakland Motor Car Co., 229 App. Div. 632, 635; Downey v. Shipston, 206 App. Div. 55, 58; International Paper Co. v. Rockefeller, 161 App. Div. 180, 185, supra; Stannard v. Reid Co., 114 App. Div. 135, 136; 6 Williston, Contracts [Rev. ed.], § 1963; see, generally, 10 N.Y. Jur., Contracts, §§ 356, 357, 359, 372; Ann.: Contract-Performance-Impossibility, 84 A L R 2d 12, esp.
The difference between the application of substitute performance, section 554.2614, and impracticability, section 554.2615, is “whether the failure or impossibility of performance arises in connection with an incidental matter or goes to the very heart of the agreement.” SeeIowa Code § 554.2614(1), cmt. 1; compare Meyer v. Sullivan, 40 Cal.App. 723, 181 P. 847, 850 (1919) (applying UCC § 2–614 and entitling seller to a substitute method of delivery when the war cancelled the contracted steamer's sailing schedule) with Int'l Paper Co. v. Rockefeller, 161 A.D. 180, 146 N.Y.S. 371, 374 (N.Y.App.Div.1914) (applying UCC § 2–615 and excusing performance when the trees to be sold were destroyed by fire); see also Transatlantic Fin. Corp. v. United States, 363 F.2d 312, 319–20 (D.C.Cir.1966) (denying an excuse of impracticability when the Suez Canal closed changing the contracted delivery route but an alternative route was available, even though more expensive). When the buyer breaches the contract by refusing to accept the contracted good and the excuse of impracticability is unavailable, the aggrieved seller may cancel.
In the absence of words denoting an intent to assume the risk of a supervening impossibility of performance occasioned either by the destruction of the subject matter or the interposition of a law forbidding or preventing performance, a promisor is freed from liability for nonperformance by such happenings. Holmes v. Montauk Steamboat Co. (C.C.A. 2) 93 F. 731; Ontario Deciduous Fruit Growers' Ass'n v. Cutting Packing Co., 134 Cal. 21, 66 P. 28, 53 L.R.A. 681, 86 Am. St. Rep. 231; International Paper Co. v. Rockefeller, 161 App. Div. 180, 146 N YS. 371; The Kronprinzessin Cecilie, 244 U.S. 12, 22, 37 S. Ct. 490, 61 L. Ed. 960; Thompson v. British Berna Motor Lorries, 33 Times Law Review, 187; Berthoud v. Schweder, 31 Times Law Review, 404; Williston on Contracts, vol. 3, § 1948; South Memphis Land Co. v. McLean Hardwood Lbr. Co. (C.C.A. 6) 179 F. 417. If further performance is impossible because of the receivership or bankruptcy of the promisor, his estate must respond in damages for the breach. Central Trust Co. v. Chicago Auditorium Ass'n, 240 U.S. 581, 36 S. Ct. 412, 60 L. Ed. 811, L.R.A. 1917B, 580; Western Drug Supply Co. v. Board of Administration, 106 Kan. 256, 187 P. 701, 12 A.L.R. 1074. And so if the receivership of a third party is brought about by the connivance, aid or fault of the promisor.
Buyer was able to demand that Seller hold the goods at its warehouse so that Buyer could retrieve them at that location. See 146 N.Y.S. 371 (3d Dep't 1914). The Buyer wanted only a specific stand of trees, not a similar stand.
The destruction of defendant's factory excused such performance on its part insofar as the January, 1965 order was concerned. (See Restatement, Contracts, § 460; 105 U. Pa. L.Rev. 880-906; Stewart v. Stone, 127 N.Y. 500; International Paper Co. v. Rockefeller, 161 App. Div. 180.) In any event, the parties considered the January, 1965 order as abandoned and plaintiffs returned to their customers the deposits received on orders underlying this January, 1965 order placed with defendant.
This ruling was followed in Whipple v. Lyons Beet Sugar Refining Co. ( 64 Misc. 363, 364), where the contract was to sow sufficient seed on suitable soil as would grow a certain quantity of sugar beets for a sugar company, it being held that the contract was subject to the implied condition that if the seeds planted failed to grow on a portion of the land by reason of drought or other climatic conditions over which the party had no control, performance would be excused. Likewise in International Paper Co. v. Rockefeller ( 161 App. Div. 180, 184), Herter v. Mullen ( supra) was applied to a contract for the delivery of pulp wood which was held to be subject to the implied condition of its continued existence so that, where before the completion of the contract the timber was destroyed by fire, performance was thereafter excused. Dexter v. Norton ( 47 N.Y. 62) is a leading case on the release from obligation of a vendor where the articles agreed to be delivered are destroyed by fire so that delivery became impossible, the vendor in such an event being not liable for damages for non-delivery. The opinion points out the necessity for such a construction of the contract "as to imply a condition that the property was to continue in existence."
In other words, having no mine of its own upon which it could rely, unless it was assured that it would at all times be able to purchase coal in the open market to fill these contracts, it was bound to protect the defendant. ( De Grasse Paper Co. v. Northern N.Y. Coal Co., 190 App. Div. 227.) If after the contracts were made, performance became difficult or costly to plaintiff, such fact is no adequate excuse or justification for non-performance, nor do such conditions relieve plaintiff from its obligation to pay damages ( Cameron-Hawn Realty Co. v. City of Albany, 207 N.Y. 377; Traylor v. Crucible Steel Co., 192 App. Div. 445; affd., 232 N.Y. 583; International Paper Co. v. Rockefeller, 161 App. Div. 180; Chicago, Milwaukee, etc., Railway v. Hoyt, 149 U.S. 1); and the plaintiff was at all times under the obligation of good faith and fair dealing to attempt to carry out the contracts, no matter at what loss to itself, without searching for excuses, however plausible they might be, for non-performance. ( New York Central Iron Works Co. v. U.S. Radiator Co., 174 N.Y. 331; Wheeler Co. v. Mendleson, 180 App. Div. 9.) Extraordinary conditions supervening after the contract is made do not of themselves excuse performance. ( Maryland Dredging Co. v. United States, 241 U.S. 184.)
The only "impossibility" is the time of day that the maintenance work can be performed, with the consequence of increased cost. In this regard CPN's reliance on International Paper Company v. Rockefeller, ( 161 AD 180 [3rd dept. 1914]) is inapposite, where a fire had destroyed the very lumber that was a requirement of the contract. At bar, the subject of the contract (the structures) still exist and the means (access) is still available, albeit at additional cost.