Mishara Construction Company, Inc. vs. Transitmixed Concrete Corp.
310 N.E.2d 363 (1974)
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Rule of Law:
Under UCC § 2-615, a seller's performance may be excused due to commercial impracticability if a labor dispute makes delivery impracticable, provided the non-occurrence of such a dispute was a basic assumption upon which the contract was made. Whether these conditions are met is a question of fact for the jury to determine based on the specific circumstances of the case.
Facts:
- Mishara Construction Company, Inc. (Mishara) was the general contractor for a housing project and entered into a requirements contract with Transit-Mixed Concrete Corp. (Transit).
- The contract, signed in September 1966, obligated Transit to supply all the ready-mixed concrete needed for the project, with deliveries to be made as required by Mishara.
- In April 1967, a labor dispute unrelated to Transit's own workers disrupted work on the job site.
- Although work resumed in June 1967, a picket line was maintained at the construction site until the project's completion in 1969.
- Throughout the period of the picket line, Transit made very few deliveries of concrete despite frequent requests from Mishara.
- Mishara eventually notified Transit and purchased the remainder of its required concrete from an alternate supplier at a higher price.
Procedural Posture:
- Mishara Construction Company, Inc. sued Transit-Mixed Concrete Corp. in a trial court for breach of contract.
- The case was tried before a jury, which returned a verdict for the defendant, Transit.
- The plaintiff, Mishara, as appellant, brought its exceptions to the Supreme Judicial Court of Massachusetts, the state's highest court, challenging the trial judge's refusal to give certain jury instructions and the admission of evidence related to the picket line.
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Issue:
Can a seller's failure to perform under a contract for the sale of goods be legally excused on the grounds of commercial impracticability when a labor dispute and resulting picket line prevent delivery?
Opinions:
Majority - Reardon, J.
Yes. A seller's performance can be excused for commercial impracticability due to a labor dispute and picket line, as the determination of whether such an event was an unforeseeable contingency that made performance impracticable is a question of fact for the jury, not a matter of law. The court rejected Mishara's argument that a picket line can never, as a matter of law, provide an excuse for nonperformance. Instead, it adopted the UCC § 2-615 standard of commercial impracticability, which requires a two-part inquiry. First, performance must have become 'impracticable,' meaning it involves extreme and unreasonable difficulty or expense. Second, this must be caused by a contingency whose non-occurrence was a 'basic assumption' of the contract. The court reasoned that whether a labor dispute meets this test depends on the specific commercial circumstances, including the foreseeability of the dispute and the parties' implicit allocation of risk. Therefore, it is not a fixed rule of law but a factual question for the jury to decide based on all evidence, including the history of labor relations and the severity of the disruption.
Analysis:
This case is significant for its interpretation of UCC § 2-615 and its rejection of a per se rule regarding labor disputes as an excuse for nonperformance. By framing the issue as a fact-dependent question of commercial impracticability, the court solidified the move away from the rigid common law doctrine of strict impossibility. This flexible, context-sensitive approach requires lower courts to analyze the foreseeability of the disruptive event and the parties' assumed allocation of risk. The decision provides a foundational framework for analyzing supply chain disruptions, strikes, and other external events that hinder contractual performance, ensuring that liability is determined by the specific circumstances rather than a mechanical legal rule.
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