Fact Pattern 14-1
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 14-1.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 14-1
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 14-1.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 because Daily Bread's obligation to purchase ingredients is a personal contract obligation that cannot be assigned without Enriched's consent. Since Flat Bread has refused to assume Daily Bread's contract, Enriched is left with no other choice but to terminate the contract and seek damages for the remaining three years of the contract.

Fact Pattern 14-1 Daily Bread Bakeries, Inc., Contracts to Buy All of Its