## Facts

- enXco Development Corporation and Northern States Power Company (NSP) contracted to develop and transfer a North Dakota wind-energy project known as the Merricourt Project.
- The parties executed two related agreements in October 2008: (1) a Purchase and Sale Agreement (PSA) for roughly $15 million tied to transfer of development assets, and (2) an Engineering, Procurement, and Construction Agreement (EPCA) worth over $350 million.
- The agreements were structured so that neither party had to proceed with the EPCA unless the PSA closed; the PSA closing depended on specified conditions precedent.
- A key PSA condition precedent required enXco to obtain a North Dakota Certificate of Site Compatibility (CSC) by a “Long-Stop Date” of March 31, 2011.
- enXco had approximately 29 months from signing to obtain the CSC; enXco proposed the Long-Stop Date during negotiations, and NSP accepted it.
- enXco encountered delays in the permitting process, including weather-related disruption, a hearing-location mistake by the regulator, and notice requirements that required rescheduling.
- enXco did not obtain the CSC by the Long-Stop Date.
- After March 31, 2011, NSP invoked the PSA’s express termination right based on failure of the condition precedent, ending the PSA and effectively the related EPCA.
- enXco claimed termination caused several million dollars in losses from development expenditures, but it had not transferred real property or project assets to NSP before termination.
- enXco sued for breach of contract and declaratory relief; the district court granted summary judgment to NSP, and enXco appealed.

## Issues

1. Whether temporary impracticability excused enXco’s failure to satisfy the CSC-by-Long-Stop-Date condition precedent, barring NSP from terminating under the PSA.
2. Whether enforcement of the condition precedent and termination clause should be avoided to prevent disproportionate forfeiture.

## Decision

- The Eighth Circuit affirmed summary judgment for NSP.
- Assuming without deciding that Minnesota law could apply temporary impracticability to excuse or extend a condition precedent, the court held the doctrine did not apply on these facts.
- The court rejected enXco’s disproportionate forfeiture argument and enforced the condition precedent and termination clause as written.
- NSP’s termination under the PSA was not a breach because the CSC condition precedent was unsatisfied on the Long-Stop Date.

## Legal Principles

- Clear conditions precedent in sophisticated commercial contracts are generally enforced as negotiated, particularly where the contract expressly allocates risk and provides a termination right upon nonoccurrence.
- Temporary impracticability does not excuse nonoccurrence of a condition precedent absent proof that the claimed impediment actually caused the failure to meet the condition and that the obligated party acted with due diligence.
- Disproportionate forfeiture relief is limited and typically requires a true forfeiture of benefits already conferred on the other party; sunk development costs incurred in a conditional transaction, without transfer of assets, ordinarily do not justify excusing an express condition.
- Courts will not use equitable doctrines to reallocate permitting and timing risks that the parties expressly assigned through a firm “long-stop” date and termination provision.

## Conclusion

The court enforced a firm permit-by condition precedent and related termination right, holding that routine permitting delays and the developer’s sunk costs did not justify excusing the missed Long-Stop Date under temporary impracticability or disproportionate forfeiture.


enXco Development Corp. v. N. States Power Co., 758 F.3d 940 (8th Cir. 2014)