Mineral Park Land Co. v. Howard

Supreme Court of California · 1916 · Contracts

Contractsimpossibilityimpracticabilityexcuseimpossibilityimpracticabilityassumed existenceavailable materials

Facts

Plaintiff granted defendants the right to haul gravel and earth from plaintiff's land for use in constructing a bridge, and defendants agreed to take from that land all gravel and earth necessary for the fill and cement work, estimated at about 114,000 cubic yards. Defendants actually took 50,131 cubic yards and obtained the rest of the material used from elsewhere. The trial court found that although plaintiff's land contained more than 101,000 cubic yards in total, only 50,131 cubic yards were above water level, and any greater quantity could be obtained only by using a steam dredger at ten to twelve times the usual cost and then drying the material at great expense and delay. The court also found defendants had taken all material that could be taken advantageously or practically from a financial standpoint.

Issue

Were defendants excused from taking additional gravel and earth from plaintiff's land when more material physically existed there, but it could be removed only by extraordinary means at prohibitive cost and with great expense and delay? Put differently, did the contract require defendants to take all material literally present on the land, or only the quantity available for practical use under the parties' assumed basis of the agreement?

Rule

When contractual performance depends on the existence of a given thing that the parties assumed as the basis of their agreement, performance is excused to the extent that the thing turns out to be nonexistent or unavailable. In legal contemplation, a thing is impossible when it is impracticable, and it is impracticable when it can be done only at an excessive and unreasonable cost; mere added expense or loss is not enough, but prohibitive cost that makes performance impracticable is treated like nonexistence.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Sacramento, Sierra Span Builders contracted with Alder Creek Holdings for the right to remove all sand needed for a municipal retaining wall from Alder Creek’s parcel. About 40,000 tons were reachable by ordinary trucks, but the remaining needed sand lay under saturated silt and could be recovered only with specialized pumping equipment at eleven times the normal extraction cost, followed by extensive drying before use.

If Alder Creek sues because Sierra Span obtained the remaining sand elsewhere, which result is most consistent with the governing rule?

Explanation. Performance is excused when it depends on the assumed existence of a thing available for use, and in legal contemplation a thing is impossible when it is impracticable. Impracticability exists when performance can be accomplished only at excessive and unreasonable cost, not merely at some added expense. Here, the remaining sand was physically present but not available in the practical sense contemplated by the parties because extracting and preparing it would require prohibitive cost.