## Facts

- A private developer and his construction corporation contracted with a municipal development agency to buy and develop town-owned industrial park land for \$985,900, with a \$100,000 deposit.
- The contract required the agency to convey the property sixty days after (1) submission and approval of final construction plans and (2) submission of evidence of sufficient mortgage financing.
- The contract provided two termination mechanisms:
  - The developer could terminate and recover the deposit if, after preparing plans satisfactory to the agency, he could not obtain necessary financing.
  - The agency could terminate and retain the deposit as liquidated damages if the developer failed to submit acceptable construction plans.

- The developer submitted preliminary materials but never submitted final construction plans acceptable under the contract.
- A referee found the developer made diligent efforts but could not obtain mortgage financing.
- The agency voted to terminate under its plan-failure clause and keep the deposit; shortly after, the developer attempted to terminate under the financing clause and demanded return of the deposit.
- The agency refused to return the deposit, and the developer and corporation sued to recover it.

## Issues

1. Whether commercial impracticability excused the developer’s contractual duty to submit final construction plans when mortgage financing became unavailable despite diligent efforts.
2. Whether the contract’s express allocation of financing risk and plan-submission obligations barred use of impracticability to recover the deposit.

## Decision

- The Connecticut Supreme Court affirmed judgment for the town and development agency.
- The court held that commercial impracticability did not excuse the failure to submit final construction plans.
- The inability to obtain financing was foreseeable and specifically addressed by the contract, so it was not an event whose nonoccurrence was a basic assumption of the agreement.
- Because the duty at issue was submitting plans, not obtaining financing, claimed “futility” from financing failure did not discharge the plan-submission obligation.
- The agency was entitled to retain the \$100,000 deposit as liquidated damages under the contract’s termination provision.

## Legal Principles

- Impracticability discharges a contractual duty only if performance is made impracticable by an event whose nonoccurrence was a basic assumption of the contract, the event occurred without the obligor’s fault, and the obligor did not assume the risk by agreement.
- Foreseeable events contemplated and allocated by the parties in the contract generally do not support discharge for impracticability.
- A party cannot invoke impracticability to avoid a distinct contractual condition (e.g., submitting plans) merely because another condition (e.g., financing) appears unattainable, absent impracticability of the performance actually owed.
- Where a contract conditions deposit recovery on completing specified steps and separately authorizes the other party to retain the deposit as liquidated damages upon nonperformance, courts will enforce that allocation of risk rather than rewrite it through impracticability.

## Conclusion

The court enforced the contract’s risk allocation by holding that financing unavailability did not excuse the developer’s duty to submit final plans, and it upheld the agency’s right to terminate for plan nonsubmission and retain the deposit as liquidated damages.


Dills v. Town of Enfield, 210 Conn. 705, 557 A.2d 517 (Conn. 1989)