Question
Mel's Pizza Supply signs a contract to buy 500 pounds of dough from Giovannis, a small organic food manufacturer, as long as an independent organization
Mel's Pizza Supply signs a contract to buy 500 pounds of dough from Giovannis, a small organic food manufacturer, as long as an independent organization inspects the dough and certifies that it contains no preservatives or gluten. Mels has a contract with several restaurant chains to supply dough and intends to use Giovannis dough to fulfill these contracts. While Giovannis is preparing a batch of dough, a machinery malfunction destroys the product. Giovannis attempts to purchase gluten and preservative-free dough from other manufacturers, but the price is twice the normal market price. Giovannis is too small to absorb this cost and immediately notifies Mel's that it will not fulfill the contract. Using the information presented in the chapter, answer the following questions.
1. Suppose that the dough does not pass the preservative/gluten inspection. Which concept discussed in the chapter might allow Mel's to refuse to perform the contract in this situation?
2. Under which legal theory or theories might Giovannis claim that its obligation under the contract has been discharged by operation of law? Discuss fully.
3. Suppose that Giovannis contacts every dough manufacturer in the country and buys the last remaining preservative-free and gluten-free dough anywhere. Nevertheless, it is only able to ship 450 pounds to Mels. Would this fulfill Giovannis obligations to Mel's? Why or why not?
4. Now suppose that Giovannis sells its operations to Heaven's Best. As a part of the sale, all three parties agree that Heaven's Best will provide the dough as stated under the original contract. What is this type of agreement called?
Answer the above questions based on the case above, and label your answers 1-4 respectively. No need to retype the questions, only provide your answers. Your responses should be in complete sentences (not just "yes" or "no") and clearly explain the rationale for your answers. Reference the information provided in the chapter and textbook. See Grading Rubric below.
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