Canadian Industrial Alcohol Co. v. Dunbar Molasses Co.
Citation
258 N.Y. 194 (N.Y. Court of Appeals, 1932)
Facts
Dunbar Molasses contracted to supply a quantity of molasses to Canadian Industrial Alcohol but failed to deliver when its expected source — a particular refinery — did not produce enough. Dunbar claimed excuse based on its inability to procure the molasses. The contract did not expressly condition Dunbar’s performance on supply from any specific source.
Issue
Whether a seller is excused from its contractual obligation to deliver goods when it is unable to procure sufficient supply from a third-party source not expressly named in the contract.
Holding
The court held that Dunbar was not excused; the seller bore the risk of its inability to procure the molasses and was liable for breach.
Rule
A seller cannot be excused for failure to deliver based on inability to procure goods from a specific source unless the contract expressly conditions performance on that source; vague assumption that supply would be available is insufficient.