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Feeling insecure? (fear of breach of contract)(Murray's Law)
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Purchasing
- Article date:
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June 6, 1996
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Copyright informationCOPYRIGHT 1996 Reed Business Information. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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A party who fears another party may breach a contract must have reasonable grounds for insecurity in order to demand an adequate assurance that the contract will be honored. Such assurance must be demanded in writing, and the suspect party has 30 days to provide an explanation or a guarantee. For example, if a supplier knows a buyer is in financial trouble, the supplier may demand prepayment for equipment. Likewise, if a buyer knows a supplier has breached similar contracts, the buyer can assume ownership of a piece of equipment before it is complete.
The typical contract is an exchange of promises which the law will enforce. A buyer promises to buy and a seller promises to sell for an ...
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