Mermaid owns an exceptionally seaworthy boat that she charters for sport fishing at a $500 daily rate. The fee includes the use of the boat with Mermaid as the captain, and one other crew member, as well as fishing tackle and bait. On May 1, Phinney agreed with Mermaid that Phinney would have the full-day use of the boat on May 15 for himself and his family for $500. Phinney paid an advance deposit of $200 and signed an agreement that the deposit could be retained by Mermaid as liquidated damages in the event Phinney canceled or failed to appear. For this question only, assume the following facts. On May 15 at 1 a.m., the Coast Guard had issued offshore "heavy weather" warnings and prohibited all small vessels the size of Mermaid's from leaving the harbor. This prohibition remained in effect throughout the day. Phinney did not appear at all on May 15, because he had heard the weather warnings on his radio. Which of the following is an accurate statement? 
The contract is discharged because of impossibility, and Phinney is entitled to return of his deposit.  The contract is discharged because of mutual mistake concerning an essential fact, and Phinney is entitled to return of his deposit.  The contract is not discharged, because its performance was possible in view of the exceptional seaworthiness of Mermaid's boat, and Phinney is not entitled to return of his deposit.  The contract is not discharged, and Phinney is not entitled to return of his deposit, because the liquidated-damage clause in effect allocated the risk of bad weather to Phinney. 
Question: Mermaid owns an exceptionally seaworthy boat that she charters for sport fishing at a $500 daily rate. The fee includes the use of the boat with Mermaid as the captain, and one other crew member, as well as fishing tackle and bait. On May 1, Phinney agreed with Mermaid that Phinney would have the full-day use of the boat on May 15 for himself and his family for $500. Phinney paid an advance deposit of $200 and signed an agreement that the deposit could be retained by Mermaid as liquidated damages in the event Phinney canceled or failed to appear. For this question only, assume the following facts. On May 15 at 1 a.m., the Coast Guard had issued offshore "heavy weather" warnings and prohibited all small vessels the size of Mermaid's from leaving the harbor. This prohibition remained in effect throughout the day. Phinney did not appear at all on May 15, because he had heard the weather warnings on his radio. Which of the following is an accurate statement? 
A. The contract is discharged because of impossibility, and Phinney is entitled to return of his deposit. 
B. The contract is discharged because of mutual mistake concerning an essential fact, and Phinney is entitled to return of his deposit. 
C. The contract is not discharged, because its performance was possible in view of the exceptional seaworthiness of Mermaid's boat, and Phinney is not entitled to return of his deposit. 
D. The contract is not discharged, and Phinney is not entitled to return of his deposit, because the liquidated-damage clause in effect allocated the risk of bad weather to Phinney. 
Answer: