Abstract
Contracts sup'ply a measure of predictability in an uncertain world. By entering into contracts, parties ensure predictable future sources of supply and secure buyers for their products. The very uncertainty that promotes the formation of contracts, however, may cause the obligations undertaken to become disastrously burdensome. When that occurs, courts have used the well-established doctrines of impracticability and frustration to rescue a promisor from the consequences of his promise. Because contractual predictability is so basic to our society, however, courts have been reluctant to release parties from their contractual obligations or to rewrite contractual terms. Thus, they have used these escape doctrines as narrow exceptions, allowing restricted remedies. The recent case of Aluminum Company of America v. Essex Group, Inc. ("ALCOA"), rejected the traditional reticence of courts to alter contractual obligations. Noting that the usual remedies of rescission and restitution may not be responsive to problems created by long-term contracts, the ALCOA court asserted that a "new spirit" of equity should allow courts to adjust the terms of long-term contracts to meet changing circumstances. Additionally, ALCOA suggested that the doctrine of mistake may be applied to relieve a party to a long-term contract from unexpectedly burdensome obligations.
Recommended Citation
Zundel, Michael N.
(1982)
"Equitable Reformation of Long-Term
Contracts-The "New Spirit"of ALCOA,"
Utah Law Review: Vol. 1982:
No.
4, Article 8.
Available at:
https://dc.law.utah.edu/ulr/vol1982/iss4/8