On December 22, 2022, Justice Reed of the New York County Commercial Division issued a decision in J.P. Morgan Ventures Energy Corp. v. Miami Wind I, LLC, 2022 NY Slip Op. 51308(U), holding that financial hardship was no excuse for failing to perform a contract, explaining:
Here, the Buyer correctly contends that the Sellers cannot rely on their inability to generate electricity at their respective windfarms during the storm to excuse their nonperformance. The hedge agreements specifically provide that the loss or failure of Seller’s supply does not constitute a force majeure event. Moreover, it is undisputed that in order to fulfill their obligations, the Sellers purchased and scheduled delivery of energy to the Buyer through ERCOT. Therefore, their windfarms’ ability to generate electricity during the storm does not excuse their failure to perform.
The Buyer also correctly contends that, to the extent the Sellers failed to fulfill their obligations due to financial considerations brought about by the storm, such as an increase in the price of energy, these circumstances do not constitute a force majeure event. The definition of “Force Majeure” in the hedge agreements does not expressly mention an increase in the price of energy and states that it is an “event or circumstance . . . not anticipated as of the date the” contracts were entered into. Price fluctuation is clearly an event or circumstance anticipated by the parties inasmuch it is the circumstance underlying the entire purpose of the contract. The impact of weather on the ability of a windfarm to produce electricity also cannot be viewed as an unanticipated event.
Furthermore, financial hardship is not a basis, in and of itself, for avoiding performance under a contract.
Similarly, an increase in the price of energy occasioned by the storm cannot form the basis for a frustration of purpose defense.
(Internal quotations and citations omitted).