Reference no: EM131675325

Question: THRIFTY RENT-A-CAR SYSTEM v. SOUTH FLORIDA TRANSPORT U.S. DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA

FACTS: The plaintiffs, Thrifty Rent-A-Car System and its affi liates DTG and Rental Car Finance Corp., allowed South Florida Transport (SFT), the defendant, to establish a Thrifty franchise. In 2003, they entered into four agreements, providing SFT the right to use Thrifty's trademark and business methods in exchange for payment to Thrifty of licensing and administrative fees and requiring SFT to maintain a fl eet of automobiles for rent. In July 2004, SFT provided DTG with a check as payment, but it was returned for insuffi cient funds. SFT continued to make delinquent payments, and by August, SFT owed Thrifty and DTG $1,134,819.40. Due to SFT's failure to make payments, Thrifty and DTG informed SFT that they would terminate the licensing agreements and repossess the vehicles, to which DTG had legal title. However, DTG agreed to postpone repossession due to predictions of severe weather and allowed SFT to continue renting vehicles until repossession was completed. When DTG repossessed the vehicles, DTG noticed that numerous cars were missing. SFT notifi ed DTG that it had sold 51 vehicles without authorization. By August 2005, SFT owed Thrifty and DTG $4,238,249.53. SFT claimed

ISSUE: Under what circumstances will commercial impracticability excuse nonperformance of a contract?

REASONING: In the words of the court:

DECISION AND REMEDY: The plaintiffs' motion for summary judgment was granted.

SIGNIFICANCE OF THE CASE: This case illustrates how strictly courts look at the circumstances to determine whether to apply the doctrine of commercial impracticability.

CRITICAL THINKING: Especially given the increased rates of severe weather and natural disasters witnessed recently around the world, to what extent can parties entering into contracts reasonably be expected to plan for the effects of a rapidly changing global climate?

ETHICAL DECISION MAKING: What values do you think are furthered by the decision in this case? What values are being subordinated by this decision?