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Homers Frozen Foods has a two - year contract with Johnson Farms to purchase all the russet potatoes that Johnson can produce for two dollars
Homers Frozen Foods has a twoyear contract with Johnson Farms to purchase all the russet potatoes that Johnson can produce for two dollars per kilogram. When the price of potatoes goes up during the second year of the contract, Johnson Farms breaches its contract with Homers and sells its potatoes to Land of Lakes Foods. Homers purchases the potatoes it needs from Homegrown Farms at a price of three dollars per kilogram. If Homers sues Johnson Farms for breach of contract, the likely result will be:
Johnson Farms will have to pay Homers one dollar per kilogram for the potatoes that Homers purchases from Homegrown Farms during the remainder of the contract.
Johnson Farms will be ordered to specifically perform the contract.
Johnson Farms will have to pay Homers one dollar per kilogram for all potatoes purchased during the entire term of the contract.
Johnson Farms will have to pay nothing, because a spike in market prices is a sufficient reason to terminate the contract.
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