Sun Maid Raisin Case: Sun Maid Raisin Growers signed a contract to buy 1,800 tons of raisins from Victor Packing Co.in California early in the year. Note, raisins come from dried grapes. Victor planned to supply the raisins by purchasing them in the market very late in the year in order to get a good price to meet their contract obligations to Sun Maid. Victor waited too long. Heavy, "disastrous" rains destroyed 50% of the crop, and the price of raisins skyrocketed from $860 per ton to $1,600 per ton. Victor felt they could not meet Sun Maid's contract price without sustaining "disastrous" losses, and it notified Sun Maid that it was repudiating the contract. When Sun Maid sued for damages for breach of contract, Victor Packing Co. claimed that it should be excused from its performance obligations under the doctrine of commercial impracticability. Answer these two questions:1) If you were the judge in this case: In forming your decision, you will need to assess whether the heavy rains and subsequent increase in market price of raisins were "foreseeable" events. How will you decide this question, and why? 2) How will you rule in this case? (that is, who wins and why? Defend your position completely taking into account its impact on both parties.)
1) In this case the Victor Parking Co. planned to purchase raisins very late in the year and waited very long for the benefit of getting good price which clearly makes this fact evident thay he knew the months he plans to purchase raisins will be accompanied by bad weather as California recieves heavy rains and bad weather in the end months of year in which the risk of increasing the market price of the product will be obviously more. Thus this makes it clear that heavy rains and subsequent increase in the market price were foreseeable events to any rational person. So his decision of waiting them very late in the year makes the rains foreseeable.
Why?
This fact makes clear that Victor parking co. cannot term the contract as doctrine of commercial Impracticability
Because for a contract to be commercially Impracticable it needs to meet or satisfy three important conditions :
1) Some event might have taken place which was not assumed to be taking place in the original contract.
2) The occurrence of the event might have maken it impossible or very expensive to discharge the obligation
3) The party could not have reasonably foreseen that this event will take place...
So it can be concluded that even if the first two conditions are satisfied by the Victor, it fails to meet the third one which makes it unreasonable to term the contract as commercially impracticable.
2) I will rule this case by first gathering all the facts that favour the breach of contract has occurred on part of Victor for not being able to discharge the obligation.. In this case I will review the conditions of contract as per Sun Maid Raisin has signed a contract to buy 1,800 tons of raisins from Victor Packing Co.in California early in the year. While as Victor planned to supply tyte raisins late in the year reflecting clearly the mistake of Victor for waiting too long when terms clearly mentioned that contract to purchase took place early in the year. Thus the discharge of contract was deliberately deferred.
Now I will look at the ruling whether the doctrine of commercial Impracticability was applicable. As explained above there are three conditions needed to be satisfied for qualifying for this ruling in which the Victor fails to fulfill the third condition of "unforeseeable event" Because California is expected to receive rainfall in late part of year and increase of prices is the most usual result thus making event foreseeable.
Therefore Sun Maid Raisin will win and prevail in the court.
The impact will be that Victor will be made to pay for the damages suffered by the other part if they are less than sustaining disastrous loss for discharging obligation.
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Hope I explained well...
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Sun Maid Raisin Case: Sun Maid Raisin Growers signed a contract to buy 1,800 tons of...
Case review for Alaska Packers Assoc. v Domenico (9th Circuit, 1902) Issue, Ruling, Application, Conclusion ROSS, Circuit Judge. The libel in this case was based upon a contract alleged to have been entered into between the libelants and the appellant corporation on the 22d day of May, 1900, at Pyramid Harbor, Alaska, by which it is claimed the appellant promised to pay each of the libelants, among other things, the sum of $100 for services rendered and to be rendered....