Also known as: substituted performance · substitute performances · substitution of performance
Written by attorneys · grounded in primary & secondary sources — see below
A commercially reasonable alternative performance that a party must tender and accept when the agreed manner of delivery or performance becomes impracticable without fault of either party. The substitute must allow substantial performance of the remaining contractual obligation.
Sasha Stone contracted to deliver wheat f.o.b. Kosmos Steamer at Seattle. War canceled that steamer line. Sasha located a commercially reasonable alternative carrier and tendered delivery by that route. The buyer had to accept the substitute performance.
Skyline Construction agreed to unload steel at a specific dock that later collapsed. A nearby commercial dock offered equivalent service at comparable cost. Skyline tendered delivery there. The buyer was required to accept the substitute unloading.
Spencer Silver promised custom brackets but a supply ban blocked one alloy. He used a reasonable substitute alloy for the practicable portion. A court weighing specific performance would consider the difficulty of procuring a suitable substitute by means of money damages.
Select any source to read its text and confirm it supports the definition.
Solstice Ventures contracted to ship produce but a storm closed one agreed port. The seller allocated remaining capacity and tendered substitute delivery through an open port. The buyer had to accept the commercially reasonable substitute.
Santiago Sanchez chartered a vessel for a fixed route that became blocked. The carrier offered a commercially reasonable alternate route. Sanchez accepted the substitute performance and the court treated it as satisfying the delivery obligation.
Scott Summers assigned a distribution contract to a new entity. The assignee offered substitute performance through its own sales network. The obligee accepted the substitute because it was commercially reasonable and fulfilled the delivery duty.
A party must tender and accept a commercially reasonable substitute when the agreed manner of delivery becomes impracticable without fault of either party. The substitute must allow substantial performance of the contract.
Supporting sources
No. When only part of performance becomes impracticable the obligor must still render the remaining practicable and substantial performance taking account of any reasonable substitute.
Supporting sources
The difficulty of procuring a suitable substitute performance by means of money damages is one factor courts consider when deciding whether damages are an adequate remedy.
Supporting sources
…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…