An oil refiner in the United States contracts on April 1 with a broker to buy crude oil from a specific foreign country with delivery to be made on July 15.On June 15,civil war breaks out in the nation that is the source of the oil,disrupting most exports.The oil refiner immediately writes to the broker demanding assurance of performance,and gets no reply.In this situation:

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The outbreak of civil war in the foreign country that is the source of the oil is a force majeure event. The oil refiner is entitled to suspend its own performance and consider the contract to be repudiated. The fact that the broker did not reply to the oil refiner's demand for assurance of performance indicates that the broker is not in a position to deliver the crude oil. Therefore, the oil refiner can suspend its performance before July 15.

An Oil Refiner in the United States Contracts on April