Asked by matthew winter on Jun 16, 2024
Verified
Brizon,a toy company,enters into a five-year agreement with Toys Paradise (TP) ,a toy shoppe.The agreement states that Brizon is to provide all the toys required by the distinguished shop at a fixed rate.During the first three years of the contract,Brizon uses its excess capacity to meet-up with the anticipated requirements and delivers between 1.25-1.5 million toys to TP.However,in the fourth year of the agreement,TP wants Brizon to deliver approximately twice as many toys,so that the toys can be used at other outlets owned by TP.In such a case:
A) Brizon may be sued by TP if it does not comply.
B) Brizon need not provide the required amount of toys.
C) Brizon has to provide the required amount of toys by putting extra charges.
D) Brizon can claim that the contract was always void.
Excess Capacity
A situation where a business produces less than it is actually capable of because there is not enough demand for its product or service.
- Analyze the implications of output and needs contracts on the quantity of goods to be delivered.
Verified Answer
BS
Brandon SpenceJun 20, 2024
Final Answer :
B
Explanation :
No quantity can be demanded or taken that is unreasonably disproportionate to any stated estimate in the contract or to "normal" prior output or requirements if no estimate is stated.
Learning Objectives
- Analyze the implications of output and needs contracts on the quantity of goods to be delivered.
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