## Facts

- Boyd Brothers, Inc. (Boyd) operated a printing business, with a significant share of its customers located along the Gulf Coast.
- Boyd entered into installment promissory notes with RCA Capital Corporation (RCA).
- All Points Capital Corporation (All Points) later became RCA’s successor in interest for purposes of enforcing the promissory notes.
- After the BP oil spill in the Gulf of Mexico, Boyd’s business declined due to reduced coastal demand for its printing services.
- Boyd defaulted on the promissory notes.
- All Points sued Boyd for breach of contract based on Boyd’s failure to make required payments.
- Boyd asserted commercial impracticability, arguing that the oil spill and its economic effects excused performance.
- All Points moved for summary judgment, contending that Boyd’s asserted defense did not, as a matter of law, excuse repayment obligations under the notes.

## Issues

1. Whether Boyd’s duty to make payments under the promissory notes was excused by commercial impracticability because the BP oil spill allegedly caused a severe decline in Boyd’s business.

## Decision

- The court granted All Points’ motion for summary judgment.
- The court rejected Boyd’s commercial impracticability defense, concluding that a downturn in Boyd’s business and reduced revenues following the oil spill did not excuse Boyd’s contractual duty to pay under the promissory notes.
- The court treated Boyd’s argument as an assertion of economic hardship, which is not enough to discharge an obligation to pay money on a note absent a contract term shifting that risk.

## Legal Principles

- Commercial impracticability requires an event that occurs without the party’s fault, the nonoccurrence of which was a basic assumption of the contract, and that makes performance impracticable—not merely more difficult or less profitable.
- A reduction in business, loss of customers, or general economic harm typically constitutes financial hardship and does not excuse a borrower’s obligation to repay a promissory note.
- Payment obligations under a promissory note generally allocate the risk of adverse business conditions to the borrower unless the agreement provides otherwise.
- Summary judgment is appropriate when the record shows no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law; a defense that fails as a matter of law cannot defeat summary judgment.

## Conclusion

The court entered summary judgment for All Points on Boyd’s defaulted promissory notes, holding that Boyd’s claimed inability to pay due to lost Gulf Coast business after the BP oil spill amounted to financial hardship rather than commercial impracticability and therefore did not excuse performance.


All Points Capital Corp. v. Boyd Brothers, Inc., 2011 WL 2790170 (2011)