Question

Kentucky Lumber and MillWork Company contracted to supply Rommell Company millwork for use in the construction of a school building. While the work was in progress the Kentucky Lumber mill was destroyed by fire. For two months thereafter, Kentucky Lumber and Millwork Company supplied Rommell with mill work purchased by it from a third party. The Kentucky Lumber mill did not wish to continue this plan and declared that the contract was ended. Rommell Company brought an action against Kentucky Lumber to enforce the contract. How will the court decide?

Answer 1

Answer:

Kentucky Lumber and MillWork Company Vs Rommell Company

Most likely, the court will decide that Kentucky should continue to perform its contract obligations.  We note that following the destruction of the mill by fire, Kentucky never invoked the clause of force majeure.   It continued to fulfill its obligations for a period of two months.  

Before the case comes to the court, Kentucky should have requested for a renegotiation of the contract price with Rommell if it had discovered that the cost of buying from third-party suppliers could prevent it from continuing with the contract.  Note that the fulfilment of a contract is not based on mere wishes but on facts, supported by the prevailing circumstances.

Explanation:

The court will decide to answer Rommell's prayers for an equitable relief by forcing Kentucky Mill to continue with the specific performance of the contract or to pay damages to Rommell for losses arising from the failure of Kentucky to fulfil the contract.

Answer 2

Answer:

Kentucky can gain advantage since it has not breached any terms of the contract.

Explanation:

Kentucky Lumber will be beneficiary of the decision since it is Rommel company who is ending up the contract but Kentucky Lumber is willing to continue the service according to the terms of the contract. Kentucky mill work was destroyed but it bought the equipment from a third party to continue providing the service according to the contract terms.