§ 41-02-78 — (2-615) Excuse by failure of presupposed conditions

Except so far as a seller may have assumed a greater obligation and subject to section
41-02-77 on substituted performance:
1. Delay in delivery or nondelivery in whole or in part by a seller who complies with
subsections 2 and 3 is not a breach of the seller's duty under a contract for sale if
performance as agreed has been made impracticable by the occurrence of a
contingency the nonoccurrence of which was a basic assumption on which the
contract was made or by compliance in good faith with any applicable foreign or
domestic governmental regulation or order whether or not it later proves to be invalid.
2. If the causes mentioned in subsection 1 affect only a part of the seller's capacity to
perform, the seller must allocate production and deliveries among the seller's
customers but may at the seller's option include regular customers not then under
contract as well as the seller's own requirements for further manufacture. The seller
may so allocate in any manner which is fair and reasonable.
3. The seller must notify the buyer seasonably that there will be delay or nondelivery and,
when allocation is required under subsection 2, of the estimated quota thus made
available for the buyer.