Fact Pattern 22-A1
Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of 1 million pounds per year, from Java Corporation for six years. After three years, Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses to assure Java that it will continue Internet's contract.
-Refer to Fact Pattern 22-A1. Java can
A) assign its rights under the contract but cannot terminate it.
B) do nothing.
C) suspend performance under the contract until Java is fully paid.
D) terminate the contract and seek damages.

Question

Fact Pattern 22-A1 
Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of 1 million pounds per year, from Java Corporation for six years. After three years, Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses to assure Java that it will continue Internet's contract.
-Refer to Fact Pattern 22-A1. Java can
A) assign its rights under the contract but cannot terminate it.
B) do nothing.
C) suspend performance under the contract until Java is fully paid.
D) terminate the contract and seek damages.

Quizplus · Accepted Answer

Java can terminate the contract and seek damages because Internet's sale to Kwik Eateries, Inc. raises uncertainty about the continuation of the contract, and Java is not obligated to continue performing under the contract if its rights are not assured.