Fact Pattern 18-1
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 18-1. Flat Bread's refusal is
A) a justified response based on Flat Bread's relation to the contract.
B) an assignment of Daily Bread's rights under the contract.
C) a reasonable suspension of performance under the contract.
D) a repudiation of the contract.

Question

Fact Pattern 18-1
​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 18-1. Flat Bread's refusal is
A) ​a justified response based on Flat Bread's relation to the contract.
B) ​an assignment of Daily Bread's rights under the contract.
C) ​a reasonable suspension of performance under the contract.
D) ​a repudiation of the contract.

Quizplus · Accepted Answer

Flat Bread's refusal to assure Enriched that it will continue Daily Bread's contract can be considered as a repudiation of the contract. Repudiation occurs when one party clearly indicates its intention not to perform, or partially perform, its duties under the contract. Flat Bread's refusal, therefore, indicates its unwillingness to continue with Daily Bread's contract with Enriched, which constitutes a repudiation of the contract.

Fact Pattern 18-1 ​Daily Bread Bakeries, Inc., Contracts to Buy All of Its

Fact Pattern 18-1 Daily Bread Bakeries, Inc., Contracts to Buy All of Its