Thank You For Submiting Feedback!
Performance may be impracticable because extreme and unreasonable difficulty, expense, injury, or loss to one of the parties is involved. A mere change in the degree of difficulty or expense due to such causes as increased wages, prices of raw materials, or costs of construction unless well beyond the normal range, does not amount to impracticability because it is this sort of risk that a fixed-price contract is intended to cover.
Appellee tenant and appellant landlord entered into a written lease containing a “fire clause” requiring the appellant to rebuild the leased building in case of fire. After a fire destroyed the leased property, appellee asked for the enforcement of the “fire clause,” but the appellant refused, resulting in the appellee’s lost business profits for a period of three years. Appellee instituted the present complaint for specific performance. The trial court ruled in favor of the appellee. On appeal, the landlord’s successors claimed that they were entitled to the defenses of unconscionability and impossibility of performance.
Under the circumstances, were the landlord’s successors entitled to the defenses of unconscionability and impossibility of performance?
The court upheld the judgment of the trial court, holding that the successors were not entitled to an unconscionability defense because they did not allege lack of knowledge or unequal bargaining position when they executed the lease agreement. The court further held that the successors were not entitled to an impossibility defense because such defense did not cover situations where a particular performance would have been a bad business risk or even a very poor deal for a prudent investor.