Question
Dairy signs a contract with School to provide all the milk School needs for the upcoming school year.The contract states School will pay Dairy a
Dairy signs a contract with School to provide all the milk School needs for the upcoming school year.The contract states School will pay Dairy a set price per unit (carton of milk) and School will order all the milk it needs (requires) from Dairy (an exclusive supplier contract).About half way through the contract (about the time the third quarter is to start) Dairy alleges the price of raw milk has increased so much that School needs to pay more money per unit otherwise Dairy will not be able to fulfill the contract terms.
School claims that the price was set for the full year and refuses to pay more money per unit to Dairy.School points out that the price of raw milk had been fluctuating quite a bit before the contract with Dairy was made and that Dairy assumed the risk of higher milk prices when it signed the contract.Dairy stopped delivering milk.Dairy claimed the contract was dischargedby commercial impracticability (or commercial frustration)since to continue delivering the milk since to do so will result in it losing money for every carton of milk it delivers.Does Dairy have a good claim?Explain.
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