FACTS. Lady Gaga fully intends to appear and perform at the Bellagio on New Year
ID: 379249 • Letter: F
Question
FACTS. Lady Gaga fully intends to appear and perform at the Bellagio on New Year’s Eve 2013. On December 30, 2015, while driving from Los Angeles to Las Vegas, Lady Gaga stops at the In Out Burger on Interstate Highway 15 near the border community of Primm, Nevada. After eating her burger, Lady Gaga becomes deathly ill with food poisoning. On her arrival in Las Vegas he is hospitalized and is physically unable to appear and perform on New Year’s Eve 2015.
QUESTION 10: Lady Gaga claims that he is excused from having to perform on New Year’s Eve. Is this true? What is the term used to describe this type of excuse of a contractual obligation? Explain your answer. Can Lady Gaga retain the $1,000,000 advance payment?
QUESTION 11: Can the Bellagio recover damages from Lady Gaga for lost ticket sales and guest cancellations even though he became ill? Explain your answer.
Explanation / Answer
During the performance of a contract, events which were unforeseen (unexpected or incapable of being known in advance) by either of the parties at the time of contracting may affect the possibility of performing the contract and ultimately discharge a party from the duty to perform. Where performance is impossible, due to the occurrence of a supervening (=an additional or unexpected) event, the parties may be discharged from performing the contract. Frustration relates to situations in which performance would be made impractical due to an unforeseen event. Doctrine of frustration is where performance is still physically possible, but would be very burdensome for the party whose performance is due.
Thus in this case Lady Gaga can retain the advance payment and Bellagio could not recover the damages from Lady Gaga. Each party is discharged from future obligations under the contract and neither party may sue for breach. The allocation of loss is decided by the Law Reform (Frustrated Contracts) Act 1943
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