Business Law 4th Edition by David Twomey,Marianne Jennings

Exercise 5

Beginnings provides rehabilitation services for alcohol and drug abuse to both adults and adolescents. New Beginnings entered into negotiation with Adbar for the lease of a building in the city of St. Louis, and subsequently entered into a three-year lease. The total rent due for the three-year term was $273,000. After the lease was executed, the city denied an occupancy permit because Alderman Bosley and residents testified at a hearing in vigorous opposition to the presence of New Beginnings in the neighborhood. A court ordered the permit issued. Alderman Bosley thereafter contacted the chair of the state's appointment committee and asked her to pull the agency's funding. He received no commitment from her on this matter. After a meeting with the state director of Alcohol and Drug Abuse where it was asserted that the director said the funding would be pulled if New Beginnings moved into the Adbar location, New Beginnings's board decided not to occupy the building. Adbar brought suit for breach of the lease, and New Beginnings asserted it was excused from performance because of commercial impracticability and frustration of purpose. Do you believe the doctrine of commercial impracticability should be limited in its application so as to preserve the certainty of contracts? What rule of law applies to this case? Decide. [Adbar v New Beginnings, 103 SW2d 799 (Mo App)]