Fact Pattern 19-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract.
Refer to Fact Pattern 19-1. Enriched Flour can pursue the following relief
A) assign its rights under the contract but cannot terminate it.
B) terminate the contract and seek damages.
C) suspend performance under the contract until Enriched is fully paid.
D) None of these answers is correct.

Question

Fact Pattern 19-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract.
Refer to Fact Pattern 19-1. Enriched Flour can  pursue the following relief
A) assign its rights under the contract but cannot terminate it.
B) terminate the contract and seek damages.
C) suspend performance under the contract until Enriched is fully paid.
D) None of these answers is correct.

Quizplus · Accepted Answer

Enriched Flour can terminate the contract and seek damages because Flat Bread's refusal to assure performance constitutes anticipatory repudiation, allowing Enriched to treat the contract as breached.