This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Impossibility of performance due to a change in foreign law or an act of a foreign state is said, by some courts, not to amount to a discharge, if the contract is not made in such state and is not gov-erned by the law of such state.1 A contract to transport laborers from one state to another, which is valid when made, but the performance of which is prevented by a law of the state from which such laborers are to be transported, forbidding such transportation, is not discharged thereby.2 A similar result was reached under an English contract to export goods from Russia, the performance of which was subsequently forbidden by a decree of the Russian government.3 A court may have power to determine what acts amount to a discharge, and by what law performance is governed; but to award damages against one because of his failure to violate the law of the foreign state in which, by the terms of the contract, he is required to perform, seems an arbitrary exercise of power.
An English contract for the use of a Swedish vessel was said not to be discharged, as far as mere impossibility is concerned, by an order by the Swedish government forbidding the use of such vessel in the manner authorized by the contract.4 An order by the contract contained an exception in case of "restraint of princes;" and such order was held to be. such restraint).
15 Fresno Milling Co. v. Irrigation Co., 126 Cal. 640, 59 Pac. 140.
16 School District v. Howard, (Neb.) 98 N. W. 666.
17 Campbell v. Gullo, 142 La. 1082, L. R. A. 1918D, 231, 78 So. 124.
1 Blight v. Page, 3 Bos. & Pul. 295 (note); Splidt v. Heath, 2 Camp. 57 (note); Jacobs v. Credit Lyonnais, 12 Q. B. D. 436; Barker v. Hodgson, 3 M. & S. 267; Furness v. Rederiaktiegolabet Banco , 2 K. B. 873; Tweedie Trading Co. v. James P. McDonald Co., 114 Fed. 985; Standard Silk Dyeing Co. v. Roeasler & Hass-lacher Chemical Co., 244 Fed. 250. 2 Tweedie Trading Co. v. James P. McDonald Co., 114 Fed. 985.
3 Blight v. Page, 3 Boa. & Pul. 295 (note.)
4 Furness v. Rederiaktiegolabet Banco , 2K.B. 873 (obiter, as the
English government, which prevented the exportation of goods from Germany, was held not to discharge a contract for the sale of general articles which could be obtained only from Germany.5 The fact that a railway is in the possession of a foreign power and that transportation on such road has become impossible, does not operate as a discharge of a contract for such transportation.6 A foreign embargo is not a discharge of the contract of employment of the seamen for all purposes.7 If the voyage is finally completed the seamen have been held to be entitled to wages for the entire period, including the time during which such embargo was in force.8 On the other hand, the act of a foreign government in prohibiting the unloading of certain goods has been held to operate as a discharge of a contract which can be performed only by unloading such goods in such country.9