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Question
Campus Bus Service entered into a contract with Smith Bus Company to purchase 10 buses. One week before Campus Bus was scheduled to receive the buses, a fire destroyed Smith's warehouse and the buses inside. As a result, Campus Bus had to purchase its buses at a higher cost from another manufacturer. If Campus Bus sues Smith Bus for damages for breach of contract under these circumstances, what defense, if any, does Smith Bus have? Assume Campus Bus did not bear the risk of loss of the goods under the contract.
A. Smith Bus should not be excused from performance because it should be ready with contingency plans or options for all unforeseeable events.
B. Smith Bus should not be excused because it did not act in good faith.
C. Smith Bus should be excused from performance under the doctrine of commercial impracticability because the fire was an unforeseen event that made it impossible for Smith to perform its contractual obligations.
D. Smith Bus is guilty of anticipatory repudiation.
Answer
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