Adequate Assurances

Question 1

Adequate Assurances are;

Answer 1

• those that are customary in the trade
• based on circumstances of the transaction
• can NOT be based upon personal assurances
• UCC - must be in writing
• Common Law - not need be in writing but good practice
• UCC - reasonable time not to exceed 30 days
• Common Law - reasonabletime

Question 2

AA Rule

Answer 2

If a party has reasonable grounds or insecurity it can make a demand for adeuate assurance of due performance and until he receives such assurance, can suspend performance.
If adequate assurance not given in reasonable amount of time = anticipatory repudiation (which is a breach)

Question 3

What are reasonable grounds to demand AA?

Answer 3

to be decided by jury using RPP standard in light of course of dealing.
Is an issue of fact that depends upon various factors, including:
-buyer’s exact words or actions
-the course of dealing or performance between the parties
-the nature of the contract and the industry
-unreliable rumors do not constitute reasonable grounds
-must not have known at the time you entered into K
-defined by commercial, not legal standards

Question 4

What is demand for adequacy

Answer 4

Defined by commercial, not legal, standards.
Request must be made in writing.
Subject to same test of commercial reasonableness and factual conditions