Objective

Distinguish between the concepts of frustration of purpose, commercial impracticability, and impossibility.

Instructions

COVID-19 has changed our daily lives in many ways. The measures that governments have taken to slow the spread of this virus have been unexpected and unprecedented. Restaurants had to stop serving dine-in customers. This loss of revenue resulted in local restaurants and even nationwide chains likeCheesecake Factoryto notify landlords that rent would not be paid. The travel industry has also been affected with canceled flights andcruises. Many concerts and sporting events have also been canceled. In some cases,a sporting event will be held but without spectatorsand the revenue they bring.

In some instances, discharge from contractual responsibilities is obvious. If you purchased a vacation on a cruise ship and the cruise company cancels the sailing, they owe you a refund and the contract is discharged. Other situations are not as simple. Suppose you own a graphics design company, BIG Designs, that designs and installs advertisements and billboards. Back in January 2020, you were very excited to sign a $10,000 contract with the city to publicize a series of concerts in the parks. The ads and billboards would be installed in March to advertise the start of the concert series in April so BIG Designs started working on designs right away. By March, your designs were finished. However, when you contacted the city for final approval of the designs, the city informed you that the concert series was canceled because the state government ordered that gatherings in public must be limited to 10 people or less.answer the following questions.

1. Assume BIG Designs has not yet been paid and that no signs or billboards have been fabricated yet. Does the city still owe BIG Designs a payment for advertisements that cannot be used? If so, how much is owed? Using the concepts in #1, ( the concepts of frustration of purpose, commercial impracticability, and impossibility) explain your reasoning.