Reference no: EM132223964

Read this paragraph and give the reasons for the court decision and also what are the impact of this court decision on business decisions in general?

Under the law of contracts, both parties under contractual obligation are susceptible to liability for breach of contract resulting out of non-compliance with any of that terms and conditions specified within the contract both express and implied, with implied conditions consisting of all reasonable and rational actions essential for execution of the contract and compliance with the terms and conditions contained therein. However, there exists or condition which is exceptional depicted by the common law doctrine of impossibility which provides concession from such liability of execution of a contract undertaken by an individual, in case of the performance being impossible or impractical. The restatement (second) of contracts provides an indication that non-performance of a contract will not be considered as a breach if it resulted from an event which was not expected to occur as a basic assumption which is implicit. This Doctrine can be avoided altogether nullified by clear definition of the force majeure clause within the contract, and specific provisions that will excuse performance of the contract. Clear definition of provisions under the force majeure clause can avoid all confusion resulting from liability for breach and adherence to performance of contractual obligations. After closing of the mill, Union Pacific could not backhaul I know and was entitled to conditions of the contract to charge a higher rate in case reloading the empty cars was prevented or hindered. WEPCO's argument not having received adequate notice for an increase in price did not impact Union Pacific's right preserved by the "no waiver" clause in the contract, even when not asserted. The duty to take reasonable steps to minimize the impact of the force majeure, did not include provision of alternatives to reloading of the cars. Union Pacific could not prevent the closing of the mill as it was beyond its control or powers and would require to be an express condition of the contract, for it to be held liable for such occurrences. WEPCO's demands and expectations unreasonable and expecting performance of contract when it is impossible. Union Pacific duty to act in good faith does not consist of its actions being detrimental to its own interests or the interests of its other customers. The trial courts grant of summary judgement is affirmed.

The court made it clear that the railroads have the right to charge a higher rate than what it is at present and even if they are unable to define its right that does not deprive them of that right at all. They actually failed to define the rate and increase the same by a notice or communication which actually kept the lower rate defined and applicable. The railroad has to perform certain duties as well and that does not mean that they will be entitled to carry the commodities of all the other shippers in this context.