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

Exercise 18

The Northern Corporation agreed to repair and upgrade the face of a dam in Alaska for Chugach Electrical Association. The work was to be done during the month of December. To repair the dam, Northern first had to secure rocks from a quarry at the opposite end of the lake from where the dam was located and then transport these rocks over a road on the ice to the dam's location. Water kept overflowing onto the road on the ice, making it difficult and dangerous to travel. Northern complained of the problem to Chugach Electrical, but nevertheless, Chugach demanded performance of the contract agreed upon. Two trucks traveling over this ice road broke through the ice causing the death of both drivers. After this incident, Northern notified Chugach that it had ceased operations and considered the contract terminated because of impossibility of performance and sued to recover expenses incurred up to the point of notification. During trial, Northern introduced evidence to show that the contract contained a clause stating that based on prior experiences, the ice would be sufficiently frozen to haul rock across the lake. That did not happen. Does Northern have a case for not performing on the contract? (Northern Corporation v. Chugach Electrical Association; SC of Alaska, 518 P 2d 76)