Flashcards Studio

A bicycle company contracted with a merchant supplier for 5,000 custom brake assemblies to be delivered in July. In May, the supplier emailed, "We will not deliver unless you agree to a 40 percent price increase. Otherwise, find someone else." The bicycle company immediately sent a written demand for adequate assurance that the supplier would perform at the contract price and suspended its own obligation to send tooling drawings. The supplier did not respond for 25 days.
On day 26, the supplier wrote, "We retract our prior email and will perform." By then, the bicycle company had signed a replacement contract with another supplier at a higher price and had canceled its production slot with the first supplier. In a separate consulting contract, a designer said, "I am worried I may be too busy next month," but also said she would try to meet the deadline.
Analyze the parties' rights regarding repudiation, adequate assurance, suspension, and retraction.