ok to assume contract if you can not deliver and all parties aware?
Company T has contract to buy product from company E. E wants to assign contract to company B to supply to T, with E being removed from future transactions. B acknowledges that it likely can not deliver desired quantity to T and E is aware of this inability. Is this contract legal given the incapacity of B to deliver and E's awareness of this incapacity. T has other business with E and does not want to alienate E but T does want to get contract volume. E is using its supply of the other materials to T to coerce T into accepting the assigned contract knowing the doubtful delivery of product.
Asked on 7/20/06, 12:07 am
1 Answer from Attorneys
James Grissom
Law Office of James P. Grissom
Re: ok to assume contract if you can not deliver and all parties aware?
This is more a Harvard Business School case than a legal question. B should contract for no more than its ability to produce. E could then go to another source for the shortfall. Failure to do so could result in legal repercussions.
Answered on 7/20/06, 9:30 am
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