## Facts

- A solar-panel manufacturer entered a 2005 long-term fixed-price take-or-pay polysilicon supply agreement with a polysilicon producer.
- The agreement required the buyer to either take a specified quantity at the fixed price or pay for that quantity even if it took less.
- The contract included a force majeure clause addressing specified events, including governmental acts, that could excuse liability when performance was made impossible.
- After contracting, foreign government subsidies allegedly depressed global polysilicon prices, making the contract price far above market.
- The buyer claimed continued performance would be economically ruinous and sought a declaratory judgment that the force majeure clause excused or limited its take-or-pay obligations.
- The seller moved for summary disposition for failure to state a claim; the trial court dismissed the complaint, and the buyer appealed.

## Issues

1. Whether the contract’s force majeure clause excused or limited take-or-pay obligations based on a government-induced collapse in market prices.
2. Whether allegations of severe economic hardship from price changes stated a claim of impossibility or commercial impracticability sufficient to obtain declaratory relief.

## Decision

- The court affirmed summary disposition for the seller under MCR 2.116(C)(8).
- The force majeure clause, as written, did not cover market-price declines that merely made performance more expensive or unprofitable.
- The buyer remained able to perform (take product or pay); the alleged harm was economic disadvantage rather than prevention of performance.
- Because a take-or-pay contract allocates the risk of falling market prices to the buyer, the buyer could not use force majeure to avoid the bargain’s downside risk.

## Legal Principles

- Unambiguous contract language is enforced as written; courts do not rewrite commercial agreements to relieve a party from an unfavorable bargain.
- A take-or-pay contract places the risk of declining market prices on the buyer and the risk of rising prices on the seller.
- Force majeure clauses are construed according to their text and generally require an event that prevents performance, not merely one that makes performance economically burdensome.
- Severe financial consequences, without contractual language extending force majeure to price-based impracticability, do not constitute legal impossibility excusing performance.
- A complaint fails to state a claim when the pleaded facts, even if true, do not bring the dispute within the contract’s force majeure terms.

## Conclusion

The court held that a buyer in a fixed-price take-or-pay supply contract could not invoke a force majeure clause to escape its payment obligations merely because government actions depressed market prices and made performance economically harsh; the contract allocated that market risk to the buyer, and the pleadings did not show performance was prevented.


Kyocera Corp. v. Hemlock Semiconductor, LLC, 313 Mich. App. 437, 886 N.W.2d 445 (Mich. Ct. App. 2015)