Tara and Daughters Limited ("Tara")enters into a contract to manufacture machinery for Big Ben Inc.The contract price is $200 000.The parties agree that the machinery is to be delivered in 60 days.Which of the following unexpected events would discharge any further obligations under the contract?
A)A number of Tara's key employees were absent through illness.
B)Tara had taken on too many other orders and had to give priority to its regular customers.
C)Tara's factory was flooded by a tsunami.
D)One of Tara's key suppliers failed to deliver necessary material to allow Tara to manufacture the machinery.
E)Tara secured a new contract on better terms with a bigger client.

Question

Quizplus · Accepted Answer

The unexpected event of a tsunami flooding Tara's factory would make it impossible for them to fulfill their obligation to manufacture and deliver the machinery within the 60-day timeline. This would qualify as a force majeure event, which would discharge any further obligations under the contract. The other options, such as Tara's employees being absent due to illness or the company securing a new contract, do not constitute force majeure events and therefore would not discharge the contract obligations.

Tara and Daughters Limited ("Tara")enters into a Contract to Manufacture