Hardwoods, a timber supplying company, contracted with a furniture manufacturer, Taylor Furniture. Hardwoods owned a large plot of land where it grew oak and beech trees. Taylor had contracted with Hardwoods to buy one ton of each type of lumber grown by Hardwoods each month at a discounted price for the next five years. However, during the second year of the contract, and tornado Hardwoods farmland, and demolished its entire supply of wood. Taylor having no other supplier sued Hardwoods for breach of contract. Hardwoods argued that their contract had been legally discharged as soon as the tornado struck because at that point it was impossible for Hardwoods to supply lumber to Taylor. The court ruled in favor of Hardwoods. But what if the facts of the case were different

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2. Instead of demanding Oak and Beech wood grown specifically on Hardwoods’ land, Taylor requests shipments of Oak and Beech wood  from Hardwoods, and specifies in the contract that if Hardwoods cannot supply the wood, then Hardwoods should obtain the requested wood from another lumber supplier.

4. After the tornado, Hardwoods and Taylor Furniture agree to a novation, whereby a competing company, Oakempire, assumes the duties of  Hardwoods stated in the original contract.

Explanation:

In common law, a tornado or any other type of natural disaster is considered an Act of God. A company cannot be held liable for such events, and if a contract is breached because of it, there is no legal responsibility (option 3 is another type of Act of God)

Also, if the law or existing regulation changes, and that change makes it impossible for a party to fulfill their obligations, they are not liable for breaching the contract (option 1).

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