LAW 600A Lecture Notes - Lecture 34: Certified Question, Federal Reporter, Counterclaim
Document Summary
If a party to a contract feels the other party may not perform and has reasonable grounds for such insecurity, the insecure party may request an assurance from the other party stating that the party will perform. See r. 2d contracts 251 & ucc 2-609 for precise requirements and remedies for insecurity. Norcon power partners v. niagra mohawk power corp. Plaintiff enters into contract with defendant to sell defendant its electricity for the next 25 years. The selling of said electricity is broken into 3 periods of time. The price of electricity for the second and third periods is based on a credit and floor/ceiling system. Defendant, through economic analysis, determines that plaintiff may not be able to meet its economic burden during the second and third period. Defendant submits in writing to plaintiff a request for assurance that plaintiff will be able to meet its economic responsibilities per the agreed contract.
