I can give you an idea. One of the cases he goes over it’s called Lloyd, the mercy Murphy of 1944 case. And in that case, the tenant was a Beverly Hills car salesman, and he signed a five-year lease. And so he signed the lease in August I think it was signed August 4, 1941. And then, the Japanese attacked Pearl Harbor on December 7, 1941, about three months later, and then that led to the US declaring war. And then on January 1, 1942, less than 30 days after Japan attacked.
The feds put a new order out, saying that no cars could be sold, no new vehicles could be sold. So auto companies were forced to halt car productions because they wanted them to direct their production to tanks and military stuff like that. And so the tenant can no longer sell new cars. He went in March 1942 he repeated his lease, which means he said I couldn’t do it and the landlord ended up suing him, the tenant said he presented an argument contract law called frustration of purpose. That says that an unforeseen event impeded his purpose of the contract kind of saying in plain English. And the court said that his hardship wasn’t that bad. It wasn’t extreme enough to get them out of the contract. And they gave two reasons. The first one said it was foreseeable to pay the war; there was informally fighting with Germany for a year before that, there was all over the news. Everybody knew about it; there was no secret that war was coming. So it was commonly known. And then later, in January 1942. Soon after, the Fed did that order. They revised they modified the law, and they allowed new car sales to military personnel and to anybody with what they call the preferential rating so that he was able to sell some cars. He then presented some evidence at trial that said that his business was 90%, new car sales, and then 10% from gasoline sales. So the court said, hey, you’re your business, you can sell some cards, and you can still sell gasoline. Your business isn’t wholly frustrated; you can still operate, and so, therefore, your contracts not frustrated. And so they rejected his argument. You know, I think this is significant with Coronavirus, because you see all these people, and it’s like, let’s take a restaurant, for instance. And they get this new lease. And there, I mean, the two questions I say is, hey, when did they sign the lease? If they signed it in January of this year, they’re going to have a hard argument because Coronavirus was already labeled as a pandemic in China. It was talked about coming over we had cases in the US, it was known, you know what I mean, similar to the way that the car dealer knew about the World War was coming. There’s that argument, and then if it was entered into before, and obviously that argument doesn’t exist before January, but then also to like a restaurant, can they still operate?
Look, a lot of these restaurants are taking off through takeout they’re doing some of them are doing more business than when they were just in and so are you able to still function and It only really, each case is going to be different. Again, I liked how he went, and he took the old cases and brought them into the new circumstance, I thought was cool analysis and if anybody has some time, they should check out that article. It’s called the virus on appeal by Myron Moskovitz. And I just looked up the date again; it is May 5, 2020, in the daily journal. So yeah, check it out.
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