YOU BE THE JUDGE WRITING PROBLEM Kuhn Farm Machinery, a European company, signed an agreement with Scottsdale Plaza Resort, of Arizona, to rent 190 guest rooms for its North American dealers’ convention during March 1991. Kuhn invited its top 225 dealers and employees from around the world, although it never mentioned those plans to Scottsdale.

On August 2, 1990, Iraq invaded Kuwait, and on January 16, 1991, the United States and allied forces were at war with Iraq. Iraqi leaders threatened terrorist acts against the United States and its allies. Kuhn became concerned about the safety of international employees traveling to Arizona, especially those coming from Europe. By mid-February, 11 of the top 50 dealers with expense-paid trips had either canceled their plans to attend or failed to sign up.

Kuhn postponed the convention. The resort sued. Did commercial impracticability or frustration of purpose discharge the contract?

Argument for Scottsdale Plaza Resort: The resort did not know that Kuhn expected to bring executives from Europe, or that if anything interfered with their travel, the convention would become pointless. Most of the dealers could have attended the convention.

Argument for Kuhn: The parties never anticipated the threat of terrorism. Kuhn wanted this convention so that its European executives, among others, could meet top North American dealers. That is now impossible. As a result, the contract has no value at all to Kuhn, and its obligations should be discharged by law.