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.
An embargo is said not to operate necessarily as a discharge of a contract whose performance it renders legally impossible for the time being.1 An embargo the time of which is not fixed by the government and which therefore may continue indefinitely, is, nevertheless, said to suspend a contract for the transportation or delivery of goods and not to discharge such contract.2 A contract for the transportation of goods to a port of another country is said to be suspended and not discharged by an order of council which forbids such shipment, although such embargo is not lifted for two years.3 A contract for the sale of goods to be exported from England, was held not to be discharged by a civil embargo placed on such export, where the embargo was dissolved ten days after it was imposed and before the expiration of the time within which such goods were to be furnished.4 This result was reached upon the theory that the embargo was intended evidently to be temporary and that the manufacturer should have waited a reasonable time before he could elect to treat the contract as discharged.5 If the contract calls for the delivery of a certain article f. o. b. at a German port, it is held not to be discharged by an embargo upon the export of such article, since the embargo may prove to be temporary or the buyer may be willing to accept delivery at a warehouse.6 A contract for the sale of an article which was to be delivered at a German port, either on board a vessel or at a certain warehouse, at the option of the buyer, was held to be valid, although the German government had placed an embargo on the export of such an article and although the seller did not know that such embargo had been imposed.7 A contract to carry goods is not discharged by the fact that the outbreak of war is imminent and that the owner of the vessel will be subject to an embargo as being in a hostile port, if it waits to load a full cargo.8 A contract to transport certain passengers is discharged by the fact that members of the crew have been mobilized, that the government has imposed restrictions upon the sailing of vessels, and that the government has taken over the coal supply.9 Even if an embargo operates as a suspension or discharge of the contract, it is not equivalent to performance,10 since impossibility is not performance,11 although it may discharge the parties to the contract from the consequences of breach.12 The fact that a vessel is kept from sailing by an embargo does not prevent such failure to sail within the time limited from being a breach of a warranty that it shall sail within such period.13 If an embargo is laid upon vessels belonging to another country by way of reprisal, such an embargo discharges the liability of a citizen of the country which laid the embargo for damages due to his inability to make use of the vessels.14 Any other rule would result in transferring the loss arising from the inability to use the vessel from the subject of the other country to the subject of the country which has imposed the embargo.15
6 Thompson. & Stacy Co. v. Evans, 100 Wash. 277, 170 Pac. 578.
7 Anglo-Russian Merchant Traders v. Batt , 2 K. B. 679.
8 The Malcolm Baxter, Jr., 263 Fed. 486.
1 Millar v. Taylor , 1 K. B. 402.
2Hadley v. Clarke, 8 T. R. 259; Baylies v. Fettyplace, 7 Mass. 325.
3 Hadley v. Clarke, 8 T. R. 259.
4 Millar v. Taylor , 1 K. B. 402.
5 Millar v. Taylor , 1 K. B. 402.
6 Jager v. Tolme , 1 K. B. 931). 7 Smith v. Becker , 2 Ch. 86.
8 Atkinson v. Ritchie, 10 East 530.
9 Foster v. Compagnie Francaise de Navigation a Vapeur, 237 Fed. 858.
10 Hore v. Whitmore, 2 Cowp. 784.
If a British vessel was in a German port when war broke out between England and.Germany, and such vessel was detained and the seamen were later imprisoned, such detention of the vessel made the further performance of the contract of employment impossible,16 and the wages of the seamen ceased at the time at which such impossibility began.17