Question

Read the Case Summary 8.6 page 270 which deals with the issue of commercial impracticability. (1) What kind of clause (that is, the specific words) would you have put in the contract if you were the buyer and had taken this course to learn about contracts? (2) Generally, when should you consider including in a contract a clause that gives you a ‘back door’ out, thereby excusing performance? In other words, knowing what you now know, which kind of contracts will you want to use a commercial impracticability-type clause?

u then saw, for the first thile, l which contained a New York forum selection clause. Movado proved by a preponderance of the evidence that the terms and conditions of the extrinsic document were incorporated into the credit agreement and that 2. 1eslc to see the extrinsic document have any bearn the case? Why or why not? CASE SUMMARY 8.6 Ner Tamid Congregation of North Town v. Krivoruchko, 638 F. Supp. 2d 913 (N.D. IIl 2009) COMMERCIAL IMPRACTICABILITY CASE QUESTIONS In 2007, real estate developer Igor Krivoruchko con- tracted with Ner Tamid Congregation of North Town, an Illinois not-for-profit corporation, to purchase prop- erty Ner Tamid owned on Rosemont Avenue in Chi- cago. After postponing the closing once, Krivoruchko refused to go forward with the deal because he said he could not obtain the kind of financing he hoped to get. The purchase contract contained no financing 1. In its decision, the district court cited newspaper articles that discussed the volatility of the economy and specifically the real estate market. Do these articles act in any way to support or defeat Kriv- oruchko's claim? 2. Should a defense of commercial impracticability be effective under circumstances in which prices are affected by changes in the local or national econ- contingency clause because, believing he was "cred- omy? Explain. itworthy" and had not had problems in the past with 3. How might Krivoruchko have protected himsli the lender with which he was dealing, Krivoruchko did under this contract? not desire one. Ner Tamid sued for breach of contract, 4. How might Ner Tamid Congregation of North Town and Krivoruchko defended, in part claiming commer-have protected itself under this contract? cial impracticability because he could not obtain the financing he wanted due to an "unanticipated" and "unforeseeable" downturn in the economy

Answer 1

1. Financial Cotingency Clause protects the buyer if he /she fails to secure financing for purchase of the property.

2. Commercial Impracticability type of claue protects the party from continuing with the contract when the performance of the contract becomes  excessively expensive, harmful, or difficult. Such clauses should be inserted in the contract if the party can foresee a high financial, operational or safety related risk that might pose difficulty later in performance of the contract.