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(solution) Shane has a requirements contract with Sky that obligates Sky to


Shane has a requirements contract with Sky that obligates Sky to supply Shane with all the gasoline Shane needs for his delivery trucks for one year at $2.30 per gallon. A clause inserted in small print in the contract by Shane, and not noticed by Sky, states, "The buyer reserves the right to reject any shipment for any reason without liability." For six months, Shane orders and Sky delivers under the contract without any controversy. Then, because of a war in the Middle East, the price of gasoline to Sky increases substantially. Sky contacts Shane and tells Shane he cannot possibly fulfill the requirements contract unless Shane agrees to pay $2.50 per gallon. Shane, in need of the gasoline, agrees in writing to modify the contract. Later that month, Shane learns he can buy gasoline at $2.40 per gallon from Collins. Shane refuses delivery of his most recent order from Sky, claiming (a) that the contract allows him to do so without liability, and (b) that he is required to pay only $2.30 per gallon if he accepts the delivery. Discuss fully Shane's contentions.

 


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Sep 13, 2020

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