Fact Pattern 22-1
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 22-1. Enriched can
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) do nothing.

Question

Fact Pattern 22-1​
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 22-1. Enriched can​
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) ​do nothing.

Quizplus · Accepted Answer

Enriched can terminate the contract and seek damages for the remaining three-year term if Flat Bread refuses to continue Daily Bread's contract. This is because Daily Bread's contract with Enriched is for a minimum requirement, and this requirement is no longer required once Daily Bread sells its assets to Flat Bread. Thus, Enriched would be justified in terminating the contract and seeking damages.

Fact Pattern 22-1​ Daily Bread Bakeries, Inc., Contracts to Buy All of Its

Fact Pattern 22-1 Daily Bread Bakeries, Inc., Contracts to Buy All of Its