Also known as: substitute performance · substituted performances · substitution of performance
Written by attorneys · grounded in primary & secondary sources — see below
A contractual doctrine requiring a party to tender and accept a commercially reasonable substitute when an agreed manner of performance becomes impracticable without fault of either party. The doctrine preserves the exchange by adjusting only the means of performance rather than discharging the duty entirely. It applies when the substitute allows substantial performance that remains practicable.
CoolTech agreed to manufacture 100,000 thermostats for Harbor by a fixed deadline. A fire destroyed one specialized assembly line. CoolTech could still produce 60,000 units on time using another existing line without unreasonable cost or delay. Harbor insisted on delivery of the feasible portion.
Sterling Manufacturing contracted to ship goods to Synergy Systems using a specified type of refrigerated rail car. The agreed carrier type became unavailable due to a sudden industry shortage. A commercially reasonable substitute using refrigerated trucks was available and would reach the destination on schedule. Synergy Systems demanded the substitute delivery.
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Sebastian Santos contracted to build a custom home for Samantha Stone using a unique imported stone that later became unavailable. A commercially reasonable domestic substitute stone was available without unreasonable cost. Samantha Stone demanded tender and acceptance of the substitute rather than damages or discharge.
Sapphire Holdings agreed to supply 100,000 custom brackets to Stonehaven Properties. A government export ban made production of 20,000 high-tolerance brackets impracticable. Sapphire Holdings could still produce the remaining 80,000 standard brackets using a reasonable substitute alloy. Stonehaven Properties demanded the feasible portion.
Nexxus Products entered a distribution agreement with Best that required Best to perform promotional services. An industry shortage made Best's original distribution method impracticable. Best tendered a commercially reasonable substitute distributor. Nexxus refused to accept the substituted performance.
Transatlantic Financing agreed to carry cargo for the United States via the Suez Canal. Closure of the canal made the agreed route unavailable. A commercially reasonable substitute route via the Cape of Good Hope was available and completed on schedule. The United States demanded acceptance of the substitute performance.
When only part of performance becomes impracticable, the duty to render the remaining part continues if that remaining performance is still practicable and substantial, taking account of any reasonable substitute the obligor is under a duty to render.
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Yes. When without fault of either party an agreed type of carrier becomes unavailable but a commercially reasonable substitute is available, the substitute performance must be tendered and accepted.
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When procuring a suitable substitute performance would be difficult to value accurately through money damages, a court may find damages inadequate and grant specific performance or another equitable remedy.
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…agreed manner of delivery becomes commercially impracticable but a commercially reasonable substitute is available, such substitute performance must be tendered and accepted.” (Emphasis added.) Compare Mr. Justice Holmes’ observation: “You can give any conclusion a logical form. You always can imply a condition in a contract. But…