Hathaway v. Sabin
63 Vt. 527 (1891)
Rule of Law:
A party is not excused from their contractual obligations due to unforeseen difficulties if the other party ultimately performs or is ready and able to perform, and the first party's actions were based on an assumption of non-performance rather than actual impossibility. Damages for breach where performance is prevented are generally the full compensation the innocent party would have earned.
Facts:
- George H. Hathaway conducted business under the name 'Redpath Lyceum Bureau, G. H. Hathaway & Co.'
- Hathaway, operating as the 'Redpath Lyceum Bureau,' entered into a contract with the defendant for a concert performance.
- The contract stipulated that the defendant would furnish a hall for the concert and pay $75 to Hathaway after the entertainment.
- For 36 hours leading up to the scheduled concert evening, an unusually severe snowstorm impacted Montpelier and its surrounding areas, making local streets and roads nearly impassable.
- On the day of the concert, the musicians, who were in Barre after traveling from Montpelier the previous evening, faced suspended train service on the spur line connecting Barre to Montpelier.
- Around 10 o'clock in the forenoon on the concert day, the defendant telephoned Hathaway's manager, stating that the entertainment would be impossible due to the condition of the streets in Montpelier.
- Despite the earlier difficulties, an irregular train eventually transported the musicians from Barre back to Montpelier late in the afternoon.
- The musicians arrived in Montpelier early in the evening and proceeded to the hall at the appointed time, ready to perform.
Procedural Posture:
- George H. Hathaway, doing business as the Redpath Lyceum Bureau, filed a lawsuit in trial court against the defendant, alleging breach of contract for failure to furnish a hall.
- The trial court directed a verdict in favor of Hathaway for $75 plus interest.
- The defendant appealed the trial court's decision to the Vermont Supreme Court.
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Issue:
Does a party's reasonable, but ultimately mistaken, belief that unforeseen and difficult circumstances (such as a severe snowstorm) will prevent the other party's performance excuse the first party's contractual obligations when the other party eventually becomes able to perform?
Opinions:
Majority - Munson, J.
No, a party's mistaken belief that unforeseen difficulties will prevent the other party's performance does not excuse their own contractual obligations when the other party ultimately performs or is ready and able to perform. The court first addressed the defendant's claim of a variance in the plaintiff's name, finding it moot because George H. Hathaway was the sole interested party and the defendant contracted directly with 'Redpath Lyceum Bureau.' Regarding the breach, the court clarified that the plaintiff sued for damages resulting from the defendant's failure to furnish the hall, which prevented the concert, not for the unearned compensation itself. The central defense was that a severe snowstorm excused the defendant from opening the hall due to the apparent impossibility of the musicians reaching Montpelier. However, the court found this defense invalid because the musicians did, in fact, arrive. The defendant acted prematurely by notifying the manager in the forenoon that the concert was off, long before it was necessary to prepare the hall, indicating the decision was based on a belief that there would be no audience rather than actual impossibility for the musicians. A party cannot be deprived of contract benefits if they overcome difficulties and are ultimately able to perform, even if the other party reasonably believed performance would be impossible. The contract contained no provision protecting the defendant from such misfortunes. Finally, the court affirmed the directed verdict for $75 and interest, ruling that since the plaintiff incurred all necessary expenses and was prevented from earning the agreed compensation solely by the defendant's breach, the damages were necessarily the full contract price. The notice sent by the defendant did not mitigate damages, as the musicians' subsequent expenses were only those required by the situation, and the rule requiring seeking like employment was inapplicable here.
Analysis:
This case reinforces the principle that unforeseen difficulties, even severe ones like a blizzard, do not automatically excuse contractual performance under the doctrine of impossibility or impracticability unless performance truly becomes impossible. It highlights the risk assumed by a party who prematurely cancels a contract based on an assumption of the other party's non-performance, rather than waiting until actual impossibility is established. The ruling also clarifies that when a party's performance is entirely prevented by the other party's breach after the first party has made all necessary preparations, the full contract price can be an appropriate measure of damages, as the breaching party cannot claim damages would be less.
