First-Year Law Students' Examination (FYLSX)

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On January 1, a farmer agrees to sell 10,000 bushels of corn to a food processor for $5 per bushel, with delivery set for August 1. On June 1, the market price of corn has risen to $8 per bushel, and the farmer writes to the processor stating, 'Given the market prices, I will not be delivering the corn to you in August.' As of June 2, what are the processor's legal options?

The processor must wait until the delivery date of August 1 before taking any action. The processor may treat the letter as an immediate breach and sue for damages. The processor can only sue for specific performance to compel the farmer to deliver the corn. The processor's only option is to demand adequate assurance of performance from the farmer.

Correct Answer:

The processor may treat the letter as an immediate breach and sue for damages.

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