Steveis an Australian businessman who owns three coal mines in northern Queensland. He has a 10 year contract with nafi to supply her 400 tonnes of coal on or before the 20th day of each month of the contract. nafi uses the coal in her steelworks. The contract started in 2014 and has proceeded smoothly. However on 31 July this year Steve realises that because of heavy rains in the past two weeks all of Steve’s mines are flooded and he will not be able to supply nafi the contracted amount of coal from August to December 2017. He communicates the bad news to nafi on 31 July. In fact he will not have any coal to supply to nafi until January 2018 and he advises her of this.
Advise Betty using the IRAC method what choices she has. Is she entitled to terminate the contract? What do you think she would do in these circumstances? Be sure to comment on possible remedies. You do not need to discuss the formation of a contract topic here. Assume that a valid enforceable contract exists between the parties.