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.
The fact that performance proves to be more expensive than was anticipated does not constitute impossibility so as to avoid the contract.1 The fact that the contract has proved to be unprofitable does not of itself amount to a discharge.2 A contract by a street railway company to furnish transportation at a specified fare is not discharged by the fact that owing to the outbreak of the war and to the wage award of the War Labor Board the expense of furnishing such service exceeds the income therefrom,3 at least if it is not shown that such contract is unremunerative for the entire period for which such contract was to run.4 The fact that a mill can not be operated profitably at the agreed location unless a street is vacated, does not operate as a discharge of a contract to construct a mill upon such realty.5 A contract to deliver goods for export is not discharged by the fact that the operation of an internal revenue law increasing the taxes upon such article is postponed by competent authority, so that no tax is levied, and there is no tax to refund, while, on the other hand, the price of such article has gone up in anticipation of such tax, so that an unforeseen loss results.6 A contract to mine coal is not discharged by the fact that the condition of the market is such that the expense of mining the coal is greater than the price for which it can be sold.7 A contract to deliver wood is held not to be discharged by reason of the fact that owing to unforeseen circumstances the cost of securing such wood for delivery will be almost four times the contract price to be paid therefor.8 A contract to furnish water for irrigation is not discharged by the fact that the stage of the water is such that water can be furnished only by pumping, and that such method is far more expensive than that which was anticipated.9 A contract to furnish water for purposes of irrigation is not discharged by the fact that, because of a drought, water will not flow through the ditches which the promisor has constructed, at least if any other available means of furnishing water could have been used.10 A contract by which A agrees to care for B is not discharged by the fact that B's condition makes performance more difficult than was anticipated,11 and A can not ignore such contract and recover reasonable compensation for such services.12 A contract to transport goods is not discharged by the fact that the available means of transportation proves to be far more expensive than was anticipated;13 as where the carrier anticipated transportation by water and the only available means of transportation proved to be by wagon and by rail.14 A contract by which one who has sold preferred stock guarantees the payment of dividends, is not discharged by the failure of the corporation to declare dividends.15 A contract to manufacture and sell certain patented articles and to pay the patentee a royalty therefor, a certain amount being guaranteed to him, is not discharged by the fact that none of such articles have been sold, and that none can be sold except at a loss.16 A contract between a steam railroad running to Coney Island and a street railroad whose motive power then was horses, and which could not then run to Coney Island in competition with the steam railroad, by which on consideration of the right to use the tracks of the steam railroad the street railroad is to run its cars to the other's depot, is not discharged by the fact that the street railroad subsequently adopts electricity as a motive power and is able to compete with the steam railroad.17 A contract giving to A the right to maintain an outside stairway from his building over B's land is not discharged by the fact that such land since then has greatly increased in value.18 A contract to procure a right of way excepting the right to maintain a drawbridge is not discharged by the fact that the railroad company is unable to obtain a charter for such drawbridge, and that the entire road must therefore be abandoned. The party who has obtained the right of way is entitled to the compensation agreed upon.19
15 Ess-Arr Knitting Mills v. Fischer, 132 Md. 1, 103 Atl. 91.
16 Newport News, etc., Co. v. Brick Co., 109 Ky. 408, 59 S. W. 332.
17 Newport News, etc., Co. v. Brick Co., 109 Ky. 408, 59 S. W. 332.
18 Banewur v. Levenson, 171 Mass. 1, 50 N. E. 10.
19 Connersville Wagon Co. v. McFar-lan Carriage Co., 166 Ind. 123, 3 L. R. A. (N.S ) 709, 76 N. E. 294.
1 United States. Columbus Railway Power & Light Co. v. Columbus, 249 U. S. 399, - L. ed. - [affirming, 253 Fed. 499]; Cottrell v. Smokeless Fuel Co., 148 Fed. 594, 9 L. R. A. (N.S.) 1187.
Illinois, Ptacek v. Pisa, 231 Ill. 522, 14 L. R. A. (N.S.) 537, 83 N. E. 221.
Indiana. St. Joseph County v. South Bend & M. St. By., 118 Ind. 68, 20 N. E. 499.
Iowa. Cornell v. Rodabaugh, 117 Ia. 287, 94 Am. St. Rep. 298, 90 N. W. ©99.
New York. Baker v. Johnson, 42 N. Y. 126.
Oregon. Fleishman v. Meyer, 46 Or. 267, 80 Pac. 209.
Tennessee. Fourth Nat. Bank v. Stahlman, 132 Tenn. 367, L. R. A. 1916A, 568, 178 S. W. 942.
Washington. Brown v. Ehlinger, 90 Wash. 585, 156 Pac. 544.
"Courts can not set aside contracts because the performance of them becomes more difficult or more expensive than when they were entered into. If it were so, few contracts would survive the seasons of depression that periodically recur in the business world." Brown v. Ehlinger, 90 Wash. 585, 156 Pac 544.
2 Kentucky. Bates Machine Co. v. Iron Works, 113 Ky. 372, 68 S. W. 423.
Minnesota. Stees v. Leonard, 20 Minn. 494.
New Hampshire. Leavitt v. Dover, 67 X. H. 94, 68 Am. St. Rep. 640, 32 Atl. 136.
New York. Prospect Park, etc., R. R v. R R.. 114 N. Y. 152, 26 L. R. A. 61, 39 N. E. 17.
Oregon. Pengra v. Wheeler. 24 Or. 532, 21 L. R. A. 726. 34 Par. 354; Han-thorn v. Quinn, 42 Or. 1. 69 Pac. 817; Learned v. Holbrook, 87 Or 576, 170 Pac. 530 [judgment affirmed on petition for rehearing, 87 Or. 570, 171 Put-. 222].
Pennsylvania. Beecher v. Stein, 139 Pa. St. 570, 21 Atl. 79.
3 Columbus Railway, Power & Light Co. v. Columbus, 249 U. S. 399, - L. ed,
- [affirming, 253 Fed. 499].
4 Columbus Railway, Power & Light Co. v. Columbus. 249 U. S. 399, - L. ed.
- [affirming, 253 Fed. 499].
5 Learned v. Holbrook, 87 Or. 576 170 Pac. 530 [judgment affirmed on petition for rehearing. S7 Or. 576, 171 Pac. 222].
6 Baker v. Johnson, 42 N. Y. 126. 7 Walker v. Tucker, 70 Ill. 527.
8 International Paper Co. v. Rockefeller, 146 N. Y. Supp. 371.
9 Hunter Canal Co. v. Robertson, 113 La. 834, 37 So. 771.
10 Anderson v. Adams, 43 Or. 621, 74 Pac. 215.
11 Ptacek v. Pisa, 231 Ill. 522, 14 L. R. A. (N.S.) 537, 83 N. E. 221.
12 Ptacek v. Pisa, 231 Ill. 522, 14 L. R. A. (N.S.) 537, 83 N. E. 221.
13 Fleishman v. Meyer, 46 Or. 267, 80 Pac. 209.
14 Fleishman v. Meyer, 46 Or. 267, 80 Pac 209.
I5 Fourth Nat. Bank v. Stahlman, 132 Tenn. 367, L. R. A. 1916A, 568, 178 S. W 402.
16 Beecher v. Stein, 139 Pa. St. 570, 21 Atl. 70.
17 Prospect Park, etc., R. R. v. R. R., 144 N. Y. 132. 26 L. R. A. 610, 30 N. E. 17.
18 Joeh v. 219, 45
N. E. 467.
The fact that it proves to have been imprudent to enter into the contract does not operate as a discharge.20 A contract to furnish good pasture for cattle and an abundant supply of fresh water is not discharged because imprudent.21 If A agrees to sell to B machines to cut wire nails, A is not discharged from such contract because he finds that the machines made by him for that purpose, which he had expected to deliver in performance of the contract, would not make nails rapidly enough to be profitable, and that such defect can not be remedied. He can perform the contract by delivering machines of another make.22 Subsequent facts which make performance less profitable than was anticipated do not operate as a discharge.23 A contract to furnish a book for publication by a corporation is not discharged by the fact that public disgrace has attached to the name of the former president and manager of the corporation, whose name the corporation bears.24
Whether there is any limit to the doctrine that unexpected expense does not operate as a discharge is a matter upon which there is comparatively little authority. It has been said that the increase in cost of performance may be so out of all proportion to the benefits which would result from performance that the contract may fairly be said to be impossible.25 It has been said, discussing another question, that "a man may be said to have lost a shilling when he has dropped it into deep water, though it might be possible by some very expensive contrivance to recover it."26 In this case, however, the question which was decided was the extent of injury to a vessel which would justify the owners in abandoning it as a total loss.27 A contract to remove gravel necessary for certain work has been held to be discharged if the gravel, although present upon the land, could not be taken by ordinary means or expense at a prohibitive cost.28 Whether a contract to mine a minimum quantity of coal unless "it shall be impossible" to mine such amount by reason of causes beyond the control of the party who agreed to mine such amount, is discharged by the fact that a part of the mine is so dangerous that the coal can not be removed without resorting to unreasonable and extraordinary expense, has been presented for consideration; but decision of this question was made unnecessary by the fact that the lessee remained in possession of the entire mine and that he was attempting to show such impossibility as an excuse for avoiding payment of the minimum royalty without surrendering possession.29
19 Stanton v. Ry., 59 Conn. 272, 21 Am. St. Rep. 110, 22 Atl. 300.
20 Ware Cattle Co. v. Anderson, 107 Ia. 231, 77 N. W. 1026.
See also, Fourth National Bank v. v Stahlman, 192 Tenn. 367, L. R. A. 1916A, 568, 178 S. W. 942.
21 Ware Cattle Co. v. Anderson, 107 Ia. 231, 77 N. W. 1026; Cox v. Chase, 95 Kan. 531, L. R. A. 1915E, 590, 148 Pac. 766.
22 Bates Machine Co. v. Iron Works, 113 Ky. 372, 68 S. W. 423.
23 C. F. Jewett Publishing Co. v. Butler, 159 Mass. 517, 22 L. R. A. 253, 34 N. E. 1087; Prospect Park, etc., Ry. v. Ry., 144 N. Y. 152, 26 L. R. A. 610, 39 N. E. 17.
24 C. F. Jewett Publishing Co. v. Butler, 159 Mass. 517, 22 L. R. A. 253, 34 N. E. 1087.
25 Mineral Park Land Co. v. Howard, 172 Cal. 289, L. R. A. 1916F, 1, 150 Pac. 458.
26 Moss v. Smith, 9 C. B. 94 (103).
While the cases in which it is sought to treat an unexpected expense of performance as discharge are far more common than those in which it is sought to treat an unexpected profit, an unexpected profit is governed by the same principles as those which apply to unexpected expenses; and the fact that conditions have changed so that one of the parties is benefited by the performance of the contract more than was anticipated is not a discharge of which the adversary party may take advantage.30 A lease of a telegraph line at a stipulated rate is not discharged by the fact that, owing to an increase in population and business, the profit which is earned by the lessees of such line is far greater than was anticipated when the contract was made.31