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.
Unforeseen difficulty or expense in the performance of a contract is not of itself impossibility of performance so as to operate as a discharge,1 although it is suggested that there may be such an increase in expense or difficulty as to make the contract not only unprofitable, but also so impossible from a practical standpoint, that the law will recognize and adopt the view which persons generally would take of the effect of such circumstances. This principle of impossibility in general applies to impossibility which is due to the outbreak of war; and within reasonable limits, at least, an increase in the expense or difficulty of performance which is due to the war, does not of itself operate as a discharge.2 A contract, made before the outbreak of the war, to deliver magnesium chloride at a certain price, was not discharged by the outbreak of the war which stopped the importation of such article from Germany, and which thus caused an increase in price, amounting to about sixteen per cent.3 A contract which was made before the war, to deliver a certain quantity of Finland birch in England, was held not to be discharged by the outbreak of the war which made it practically impossible to import such timber during the war,4 at least if it was not shown that the purchaser knew that such timber was not carried in stock in England and that the practice was to load such timber into vessels at Finnish ports for direct transportation to England.5 A contract for the transportation of goods by sea is not discharged by the outbreak of war if the ports to which goods are to be carried are not blockaded, although as a result of the war the insurance rates increase heavily and although the usual means by which payment is made for goods can not be employed.6 A contract by which a street railway company agrees to furnish transportation and the like at certain specified rates, is not discharged by the fact that owing to war conditions and especially to an award of the war labor board, the wages of the employes and the cost of material are such that the rates of compensation fixed by the contract are very inadequate,7 at least if it is not shown that the compensation for the entire period of the contract will be inadequate.8 In the absence of a specific agreement to the contrary, a contract to carry and transmit cable messages is not discharged because of the outbreak of war which interferes with the regularity of such service.9 In a case in which the court repeated the rule that increase in cost of production did not amount to impossibility, it construed the contract so as to provide for the manufacture of the article in question from the material from which the parties had undoubtedly expected that it should be manufactured; and it then held that if the manufacturer made every reasonable effort to secure the raw material and if he was ready to pay any reasonable sum necessary to obtain it, the fact that he could not obtain the raw material operated as a discharge of his contract.10
6 O' Niel v. Armstrong , 2 Q. B. 418.
1 Marshall v. Glanville , 2 K. B. 87.
2 Marshall v. Glanville , 2 K. B. 87.
1 See Sec. 2705 et seq.
2 Tennants v. Wilson , A. C. 405 [affirming, Wilson v. Tennants (1017), 1 K. B. 208; not affected on this point by reversal in Tennants v. Wilson (1917), A. C. 405]; Blackburn Bobbin Co. v. Allen , 2 K.B.
467, 3 A. L. R. 11 [affirming (1018), 1 K. B. 540]; Columbus Railway, Power & Light Co. v. Columbus, 240 U. S. 300, - L. ed. - [affirming, 253 Fed. 400].
3 Tennants v. Wilson , A. C. 405 [reversing, Wiison v. Tennants (1017), 1 K. B. 208; not affected on this point by reversal in Tennants v. Wilson (1017), A. C. 405].
4 Blackburn Bobbin Co. v. Allen , 2 K. B. 467, 3 A. L. R. 11 [affirming (1918), 1 K. B. 540].