## Facts

- D.S. Simmons, Inc. (Simmons) was a contractor on a long-term construction project and needed structural steel for the work.
- The Steel Group, LLC (Steel Group) agreed by contract to supply the required steel for a total price of about $393,000.
- Steel Group began performance, but before Simmons finished construction, the market price of steel rose sharply.
- After the price increase, Steel Group cut off Simmons’s steel supply and refused to continue delivering at the contract price.
- Simmons sued Steel Group in federal district court for breach of contract and sought damages.
- Steel Group admitted it did not perform as promised but argued its nonperformance was excused under North Carolina’s Uniform Commercial Code (UCC) § 2-615 (commercial impracticability).
- Steel Group offered little or no supporting evidence showing that § 2-615 applied to excuse its failure to supply the steel.
- Simmons moved for summary judgment on its breach claim. The decision is an unpublished order from the Eastern District of North Carolina dated February 19, 2008.

## Issues

1. Does a seller’s obligation to deliver under a fixed-price steel supply contract become excused under UCC § 2-615 when the only post-contract event is a substantial increase in the market price (and cost) of steel?

## Decision

- The court held that Steel Group was not excused from performance under UCC § 2-615 based solely on increased costs from market price changes.
- The court rejected Steel Group’s asserted defenses of commercial impracticability/impossibility tied to the steel price spike.
- The court granted summary judgment for Simmons on liability for breach of contract (with damages to be determined separately).

## Legal Principles

- Under UCC § 2-615 (as applied under North Carolina law), a seller generally cannot claim commercial impracticability when the only supervening event is an increase in the cost of performance.
- A fixed-price supply contract places ordinary market risk—price increases and decreases—on the party that agreed to the fixed price, absent proof of an additional qualifying contingency.
- Impossibility-type defenses require more than a deal becoming unprofitable; they require a qualifying event that truly prevents performance under the governing standard, not merely a shift in market conditions.
- On summary judgment, the party invoking § 2-615 must produce evidence supporting the elements of the excuse; conclusory assertions without supporting proof do not create a triable fact issue.

## Conclusion

In *D.S. Simmons, Inc. v. The Steel Group, LLC*, the court ruled that Steel Group’s decision to stop supplying steel after prices increased was an unexcused breach of a fixed-price contract because UCC § 2-615 does not relieve a seller from performance when the only change is a higher cost of performance, and the court entered summary judgment for Simmons on liability.


D.S. Simmons, Inc. v. The Steel Group, LLC, 2008 WL 488845 (2008)