Techstate, a hardware manufacturer in the United States, has an existing contrac

Question

Techstate, a hardware manufacturer in the United States, has an existing contract with a client based in the Republic of Karthasia, which is going through a civil war. The resulting upheaval in that country has led to some of the shipments to the client being destroyed by warring factions. As a sanction against the country, the United States government places an embargo on all exports to that country by U.S. firms. What will be the state of the contract between Techstate and the client in Karthasia after the embargo?

A) It will be terminated due to destruction of subject matter.

B) It will be terminated due to incompetency of the offeror.

C) It will be terminated due to lapse of time.

D) It will be terminated due to supervening illegality.

Explanation / Answer

The court decision has deemed exports from Karthasia unlawful and hence the contract will be terminated due to supervening illegality. Hence the correct option is D. It will be terminated due to supervening illegality.

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