"Mamma Mia's" is a small Italian specialty food store. One of the most popular food items is an organic pasta sauce called "Mamma's Original Sauce". The sauce is made by Earth Organics, a producer of organic condiments and sauces. Mamma Mia's entered into a contract with Earth Organics to purchase 100 jars of Mamma's Original Sauce for $500. The contract specifies that the jars must be delivered to Mamma Mia's by no later than October 31. On the morning of October 31, Larry, Earth Organics' general manager, called Silvia, Mamma Mia's sales employee, and told her that the locally grown tomatoes that it uses in the sauce were ruined due to extreme weather conditions. As a result, Earth Organics had no choice but to buy imported organic tomatoes for its sauce, which were much more expensive. If Earth Organics is going to recover its costs, it will have to charge Mamma Mia's $1000 for the 100 jars of sauce, instead of the agreed price of $500. When Silvia protested, Larry explained that, if Mamma Mia's did not want to pay that price, he had many other buyers who would. Mamma Mia's needed the 100 jars of sauce to meet its customers demands. Silvia felt that she had no choice, so she agreed on behalf of Mamma Mia's to pay $1000 for the 100 jars of sauce. Earth Organics delivered the sauce and, within a few days, Mamma Mia's sold all of the jars to its customers for a profit. When Mario, Mamma Mia's general manager, found out about the agreement to pay $1000 instead of $500, he was very angry. Mamma Mia's paid Earth Organics $500 but refused to pay anymore. Earth Organics believes it had a valid contract with Mamma Mia's, and Mamma Mia's is obligated to pay $1000 in total. Who is correct ? - Mamma Mia's or Earth Organics ? Explain and support your answer with reference to the applicable legal principles.