Colorado Code
Part 6 - Breach, Repudiation, and Excuse
§ 4-2-615. Excuse by Failure of Presupposed Conditions

Except so far as a seller may have assumed a greater obligation and subject to section 4-2-614 on substituted performance:

Source: L. 65: p. 1333, § 1. C.R.S. 1963: § 155-2-615.
Prior Uniform Statutory Provision: None.
Purposes:

In the case of failure of production by an agreed source for causes beyond the seller's control, the seller should, if possible, be excused since production by an agreed source is without more a basic assumption of the contract. Such excuse should not result in relieving the defaulting supplier from liability nor in dropping into the seller's lap an unearned bonus of damages over. The flexible adjustment machinery of this Article provides the solution under the provision on the obligation of good faith. A condition to his making good the claim of excuse is the turning over to the buyer of his rights against the defaulting source of supply to the extent of the buyer's contract in relation to which excuse is being claimed.
Agreement can also be made in regard to the consequences of exemption as laid down in paragraphs (b) and (c) and the next section on procedure on notice claiming excuse.
Exemption of the buyer in the case of a "requirements" contract is covered by the "Output and Requirements" section both as to assumption and allocation of the relevant risks. But when a contract by a manufacturer to buy fuel or raw material makes no specific reference to a particular venture and no such reference may be drawn from the circumstances, commercial understanding views it as a general deal in the general market and not conditioned on any assumption of the continuing operation of the buyer's plant. Even when notice is given by the buyer that the supplies are needed to fill a specific contract of a normal commercial kind, commercial understanding does not see such a supply contract as conditioned on the continuance of the buyer's further contract for outlet. On the other hand, where the buyer's contract is in reasonable commercial understanding conditioned on a definite and specific venture or assumption as, for instance, a war procurement subcontract known to be based on a prime contract which is subject to termination, or a supply contract for a particular construction venture, the reason of the present section may well apply and entitle the buyer to the exemption.
Cross References:
Point 1: Sections 4-2-613 and 4-2-614.
Point 2: Section 4-1-102.
Point 5: Sections 4-1-203 and 4-2-613.
Point 6: Sections 4-1-102, 4-1-203 and 4-2-609.
Point 7: Section 4-2-614.
Point 8: Sections 4-1-201, 4-2-302 and 4-2-616.
Point 9: Sections 4-1-102, 4-2-306 and 4-2-613.
Definitional Cross References:
"Between merchants". Section 4-2-104.
"Buyer". Section 4-2-103.
"Contract". Section 4-1-201.
"Contract for sale". Section 4-2-106.
"Good faith". Section 4-1-201.
"Merchant". Section 4-2-104.
"Notifies". Section 4-1-201.
"Seasonably". Section 4-1-201.
"Seller". Section 4-2-103.