Wilmington North Carolina Business Law and Litigation Attorney Blog

Contracts and Religion

Over at the Contracts Prof Blog, an interesting question has been posed:  can a religious observance provide an impracticability defense to a breach of contract claim ?  The case takes place in Qatar. The Gulf Times reports that In June, a man reserved a tent for his wedding, which took place in September.  A few days prior to the event, he was told that only a limited area of the tent would be available.  The reason?  The tent had been modified in preparation for the Muslim holy month of Ramadan. 

Like any good plaintiff facing a breach, the man sought to mitigate his damages.  He moved the wedding to another location.  The wedding took place as scheduled.

Now the man is preparing to file suit, claiming financial losses for having had to move the wedding.  Seems reasonable enough. In America at least, and here in North Carolina, he would have a claim for the cost to find a suitable location, and the costs associated with the rescheduling.  But would the defendant be able to defend on the grounds that it was impracticable to perform, given the need to modify the tent for other upcoming clients?

In North Carolina, impracticability can be a defense to performance. But it is generally only available if conditions change unexpectedly.  The change must be extreme and unanticipated.  In this case, it seems pretty clear that the tent vendor would have known when Ramadan would be.  He promised to make the entire tent available for wedding on September 15.  Ramadan begins on the 23rd.  It is not as though Ramadan suddenly appeared out of nowhere; a look at the calendar would have revealed it.  This appears to be a simple case of a vendor scheduling two events too closely together in time, and not having the capacity to prepare his services for both events adequately.  As such, the impracticability defense would not be available to him.

Of course, this case is probably not going to be governed by the laws of the state of North Carolina.  I'm just saying.

Business to Business Contract Litigation on the Rise

According to this article lawsuits between businesses are multiplying rapidly.  There has been particular growth in lawsuits arising out of business contracts.

The article does not go into detail about why this is.  In my experience, it involves a number of things.  (1) Many businesses do not have lawyers draft, or review, their contracts before putting them into use.  Some of these contracts go out to thousands of clients.  A mistake, or a failure to add a clause reflecting an important legal protection, can be multiplied hundreds, or thousands of times.  (2) Often, a business will settle on a form contract, then use it over and over, for years on end without ever changing it.  Yet the law changes every year; even every month.  In North Carolina alone, there are hundreds of decisions every year that act as precedent in cases involving contracts, as well as the potentially devastating Unfair and Deceptive Practices Act, which permits triple damages, often in very routine business to business breach of contract litigation.

The moral of the story?  Make sure your contracts and business practices are as up to date as possible; if your contracts with customers, vendors, suppliers, distributors and everyone else you do business with aren't up to date with the latest developments in business and contract law, you could be staring at one of these "bet the company cases.