Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 12

The LaCumbre Golf and Country Club contracted to extend membership privileges, including use of its golf course, to guests of the Santa Barbara Hotel for $300 per month. When the hotel was totally destroyed by fire and no longer able to take in guests, it stopped making monthly payments on a contract it had with the country club. LaCumbre then sued the hotel to recover the balance owed on the contract. During a court trial, the hotel contended that the destruction of its building excused further performance of its responsibilities under the contract. Is the hotel correct? (LaCumbre Golf and Country Club v. Santa Barbara Hotel Co., Cal. 271 P. 476)