Business Law Today, Comprehensive 10th Edition by Roger LeRoy Miller

Exercise 14

Discharge by operation of Law. Train operators and other railroad personnel use signaling systems to ensure safe train travel. Reading Blue Mountain Northern Railroad Co. (RBMN) and Norfolk Southern Railway Co. entered into a contract for the maintenance of a signaling system that serviced a stretch of track near Jim Thorpe, Pennsylvania. The system included a series of poles, similar to telephone poles, suspending wires above the tracks. The contract provided that "the intent of the parties is to maintain the existing... facilities" and split the cost equally. In December 2002, a severe storm broke the wires and destroyed most of the poles. RBMN and Norfolk discussed replacing the old system, which they agreed was antiquated, inefficient, dangerous to rebuild, and expensive, but they could not agree on an alternative. Norfolk installed an entirely new system and filed a suit in a federal district court against RBMN to recover half of the cost. RBMN filed a motion for summary judgment, asserting, in part, the doctrine of frustration of purpose. What is this doctrine Does it apply in this case How should the court rule on RBMN's motion Explain.