Fast Food Corporation and Giant Potatoes,Inc.,enter into a contract for Giant's sale to Fast of all of the potatoes that Fast needs.The amount of potatoes that Giant must supply is
A)all of Fast's requirements that may occur in good faith.
B)all of Giant's output that is not commercially impracticable.
C)the greatest quantity that is not unconscionable.
D)the greatest quantity that makes the contract a "square deal."

Question

Quizplus · Accepted Answer

The contract between Fast and Giant is a requirements contract, which means that Giant is obligated to provide all the potatoes that Fast needs. The UCC Section 2-306 states that a requirements contract may only be enforced to the extent of good faith and commercial reasonableness, which means that Fast cannot order a ridiculous amount of potatoes just to spite Giant. However, as long as Fast's requirements are made in good faith, Giant must supply all the potatoes that Fast needs.