Minerals Ltd. contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts, the distributor
A) can substitute some other material for the tin.
B) is excused from the performance of its contracts.
C) is liable for breach of contract.
D) must still supply the tin needs of its customers.

Question

Minerals Ltd. contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts, the distributor​
A) ​can substitute some other material for the tin.
B) ​is excused from the performance of its contracts.
C) ​is liable for breach of contract.
D) ​must still supply the tin needs of its customers.

Quizplus · Accepted Answer

The embargo imposed by the cartel of tin-producing countries is a force majeure event, which is beyond the control and reasonable anticipation of the distributor. This exempts the distributor from fulfilling its contractual obligations as long as the event makes the performance of the contract impossible or impracticable. Thus, the distributor is excused from the performance of its contracts.