In some instances, discharge from contractual responsibilities is obvious. If you purchased a vacation on a cruise ship and the cruise company cancels the sailing, they owe you a refund and
the contract is discharged. Other situations are not as simple. Suppose you own a graphics design
company, BIG Designs, that designs and installs advertisements and billboards. Back in January
2020, you were very excited to sign a $10,000 contract with the city to publicize a series of concerts
in the parks. The ads and billboards would be installed in March to advertise the start of the
concert series in April so BIG Designs started working on designs right away. By March, your
designs were finished. However, when you contacted the city for final approval of the designs, the
city informed you that the concert series was canceled because the state government ordered that
gatherings in public must be limited to 10 people or less.
1. Explain the concepts of frustration of purpose, commercial impracticability, and
impossibility. In particular, explain how they differ and whether they result in discharge of
contractual responsibilities.
2. Assume BIG Designs has not yet been paid and that no signs or billboards have been
fabricated yet. Does the city still owe BIG Designs a payment for advertisements that cannot
be used? If so, how much is owed?