Question
Jackson signs a written contract to purchase a custom sofa for his new home. The custom sofa is designed to fit perfectly in his living
Jackson signs a written contract to purchase a custom sofa for his new home. The custom sofa is designed to fit perfectly in his living room. While the sofa is being built, Jackson notifies the manufacturer that he is insolvent and can no longer fulfill his end of the contract. What remedy does the manufacturer have in this scenario?
a.) The manufacturer has no recourse in this scenario, since the buyer is insolvent.
b.) The manufacturer must put the sofa up for sale at auction, and he must share the additional profits with Jackson if the sofa sells for more than the originally-contracted price.
c.)
The manufacturer is obligated to complete production of the sofa and attempt to resell it, but he is entitled to recover any difference between the resale price and the price he contracted with Jackson.
d.)
Assuming that the sofa would be of little or no value on resale to another buyer, the manufacturer should immediately cease production and sue Jackson for the contract price, less any expenses saved by stopping production.
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