Roadway Paving Company contracts to buy some paving equipment from Stonework Earthmovers,Inc. Before either party performs,Stonework sells its assets to T-Square Corporation. On learning of the sale,Roadway is concerned about its contract with Stonework. Roadway should
A)demand assurances of performance from Stonework.
B)consider the contract repudiated and sue Stonework for breach.
C)buy the equipment from a different firm and bill Stonework for the price.
D)buy the equipment from a different firm and bill T-Square for the price.

Question

Quizplus · Accepted Answer

Roadway should demand assurances of performance from Stonework before taking any further steps. The sale of assets does not necessarily release Stonework from its contractual obligations, and it is possible that T-Square has assumed those obligations as part of the sale. By requesting assurances of performance, Roadway can determine whether Stonework intends to fulfill its contractual duties or whether it has assigned them to T-Square. This will help Roadway determine its next course of action, which may include seeking performance from Stonework or seeking damages for breach of contract.

Roadway Paving Company Contracts to Buy Some Paving Equipment from Stonework