Commercial impracticability is not a valid excuse for nonperformance where there is not an express contractual provision conditioning performance on a reasonably foreseeable risk.
Bobby Murray Chevrolet's ("Bobby Murray") bid to supply multiple North Carolina school boards ("School Boards") with bus chassis. Shortly after their bid was accepted, Bobby Murray's supplier cancelled the company's order; Bobby Murray subsequently notified the School Boards it would not be able to fulfill the agreement. The School Boards found a different company to fulfill the agreement and informed Bobby Murray that they were responsible for any excess cost. In a suit to recover the excess cost, the trial court granted summary judgment in favor of the School Board. Bobby Murray appealed, arguing in relevant part that they were excused from performance by commercial impracticability.
Was Bobby Murray Chevrolet’s (defendant) performance excused by commercial impracticability?
"Although defendant contends that its lack of performance should be excused pursuant to N.C.G.S. § 25-2-615, there is no record evidence that plaintiffs had knowledge that defendant's sole source of supply was General Motors; defendant assumed the risk of its failure to supply the vehicles; governmental regulations do not excuse performance under a contract where a party has assumed the risk of such regulation. . ."