Steel Industries Inc ordered steel from Interlink Metals Ch

Steel Industries, Inc., ordered steel from Interlink Metals & Chemicals. The steel was to be delivered from a Russian mill. There were political and other issues in Russia, and the mill was shut down. Interlink did not deliver the steel to Steel Industries, claiming that it was excused from performance because it could not get the steel from the Russian mill. What would Interlink have to establish to show that it was excused from performing under the doctrine of commercial impracticability?

Solution

Doctrine of commercial impracticability

The doctrine of commercial impracticability is applied to the cases where due to some reasons the fulfillment of the contract has become extremely difficult for a party.

The fulfillment of contract might result in huge losses for a party therefore the party restricts itself in performing the contract. The non-performance of the contract might be due to creation of some political instability in a country or due to some other reasons.

In order to prove the applicability of doctrine of commercial impracticability, following things are required to be proven:

Thus, Interlink has to show that it was practically impossible for the company to provide the required amount of steel as per the contract as the political turmoil in Russia has led to the closure of steel mills in Russia.

The delivering of steel was directly related with the production of the steel in the mills and the closure of the mills due to political turmoil has led to the reduction in the amount of steel produced.