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. Kwik's refusal constitutes
A) a justified response based on Kwik's relation to the contract.
B) an assignment of Internet's rights under the contract.
C) a reasonable suspension of performance under the contract.
D) a repudiation of the contract.

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. Kwik's refusal constitutes
A) a justified response based on Kwik's relation to the contract.
B) an assignment of Internet's rights under the contract.
C) a reasonable suspension of performance under the contract.
D) a repudiation of the contract.

Quizplus · Accepted Answer

Kwik's refusal to assure Java that it will continue Internet's contract amounts to a repudiation of the contract. A repudiation occurs when one party to a contract indicates that it will not perform its contractual obligations. In this case, Kwik's refusal to assume the contract with Java indicates that it is not willing to perform Internet's obligations, which amount to a breach of contract.