UCC § 2-615
Excuse by Failure of Presupposed Conditions
Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance: (a) Delay in delivery or non-delivery in whole or in part by a seller who complies with paragraphs (b) and (c) is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid. (b) Where the causes mentioned in paragraph (a) affect only a part of the seller's capacity to perform, he must allocate production and deliveries among his customers but may at his option include regular customers not then under contract as well as his own requirements for further manufacture. He may so allocate in any manner which is fair and reasonable. (c) The seller must notify the buyer seasonably that there will be delay or non-delivery and, when allocation is required under paragraph (b), of the estimated quota thus made available for the buyer.
Professor's notes
Elements: (1) a contingency occurs the non-occurrence of which was a basic assumption of the contract; (2) performance has been made impracticable; (3) the seller did not assume the risk by agreement; (4) the seller notifies the buyer seasonably; (5) if only part of capacity is affected, the seller must allocate among customers in any manner that is fair and reasonable.
Common misunderstanding: students think any increased cost excuses performance. It does not. Impracticability is a high bar: market shifts, currency moves, ordinary supply problems do not qualify. The contingency must be both unforeseen and severe: closure of the only supply source, war, embargo, total crop failure.
The UCC analogue of R2d § 261 with an explicit allocation rule. The allocation requirement is the spine: when a supplier cannot fill all orders, the law refuses to let her pick favorites. The good-faith allocation rule converts an excuse doctrine into a fairness-among-buyers regime.
Text
UCC § 2-615. Excuse by Failure of Presupposed Conditions.
Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance:
(a) Delay in delivery or non-delivery in whole or in part by a seller who complies with paragraphs (b) and (c) is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.
(b) Where the causes mentioned in paragraph (a) affect only a part of the seller’s capacity to perform, he must allocate production and deliveries among his customers but may at his option include regular customers not then under contract as well as his own requirements for further manufacture. He may so allocate in any manner which is fair and reasonable.
(c) The seller must notify the buyer seasonably that there will be delay or non-delivery and, when allocation is required under paragraph (b), of the estimated quota thus made available for the buyer.
Note: The supplement reproduces this provision as N.H.R.S.A. 382-A (New Hampshire’s codification of the UCC). The text reflects the post-2022 UCC Article 2 amendments as adopted in New Hampshire.