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Assessment 4 Law for Business 1Two parties Sharpsell Stores and L Ectronics have entered into a contract The case involves Sharpsell Stores agreeing to buy a particular second-hand mini computer from L Ectronics Both parties have come to the agreement that L Ectronics will completely overhaul the computer before the delivery Unfortunately prior to L Ectronics carrying out their side of the agreement the mini-computer was destroyed in a fire With this type of situation neither Sharpsell Stores nor L Ectronics are directly in breach of their contract agreements L Ectronics could not carry out their side of the agreement because the computer was destroyed When a party cannot carry out an agreement due to a fire or any other natural disaster etc in which it is impossible for the party to carry out his obligations after the agreement and prior to completion is known as supervening impossibility There are two categories within supervening impossibility rei interitus and constructive total destruction This particular case falls under the category of rei interitus as the cause of destruction was not the fault of either party and the destruction was that of an external entity If the courts rule out a contractual agreement as being rei interitus then it would result in the contract being frustrated An example of rei interitus is the case of Taylor v Caldwell in 1863 One party had booked a music hall so that they could do a series of concerts Unfortunately the music hall had burned down It was not the fault of the hall owner and therefor the courts had brought the contract to an end through frustration as the hall owner could in no way perform his obligation However one of the parties will have to bear the financial loss of the mini-computer Under Scots Law the party that has to forfeit the loss of the computer is L Ectronics The Reason for this is because
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