1. a. What did the court find with respect to the private law of the parties?
b. What did it find with respect to the application of custom?
2. Would the result in this case be different if the shipment had been tomatoes as opposed to wheat? Explain.
3. Would the result in this case be different if the United States and Transatlantic agreed by contract that shipment was to arrive in Iran within a period of time that was only possible if the shipper used the canal route? Explain.
4. What do you think it would take for a court to render a contract commercially impracticable? In this case, the shipper was forced to spend almost $ 44,000 more than it had expected to spend in performing the $ 306,000 contract. What if the added cost had amounted to $ 100,000? Would you be persuaded that the contract was then commercially impracticable? What if the closing of the canal doubled the price of the contract? Explain.
In 1956, Transatlantic Financing, a steamship operator, contracted with the United States to ship wheat from Texas to Iran. Six days after the ship left port for Iran, the Egyptian government was at war with Israel and blocked the Suez Canal to shipping. The steamer therefore was forced to sail around the Cape of Good Hope. Transatlantic accordingly sued the United States for its added expenses as a result of this change of circumstances. Transatlantic contended that it had contracted only to travel the “usual and customary” route to Iran and that the United States had received a greater benefit than that for which it contracted. The district court held for the United States; Transatlantic appealed.