Question

Todos, Ltd., agrees to market the products of United Sales, Inc., in Venezuela. When the government is unexpectedly overthrown in a revolution, Todos can continue to fulfill its contract but only for a much higher price. United agrees to pay but later files a suit to recover the difference. The court will most likely rule that

a. a change in government is a risk ordinarily assumed in business.
b. an unforeseen difficulty supported the contract modification here.
c. Todos engaged in extortion or the so-called holdup game.
d. Todos had a preexisting duty to supply the goods at the initial price.

Answer 1

B) an unforeseen difficulty supported the contract modification here.

Step-by-step explanation:

Sometimes unforeseen circumstances may change a contract and other times they might even dismiss a contract.

Usually when parties sign a contract an Unforeseen Events Clause is included. That clause usually states that neither party can be liable for losses or damages caused by unforeseen events that are beyond any of the party's reasonable control.

For example, I have a contract to provide a service in San Francisco, but suddenly an earthquake destroys the part of the city where my hotel was located and I'm forced to leave the city without performing my obligations. The other party cannot sue me for breaching the contract since the earthquake was beyond my control and knowledge.