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2. Which of the following should the court rule?
The parties' contract included a provision for termination by either party at any time upon reasonable notice. After six months of performance on both sides, the pastry company, claiming that its old bun-baker had become uneconomical and that it could not afford a new one, dismantled the bun-baker and began using the space for making dog biscuits. The pastry company's output of baked buns having ceased, the baked goods retailer sued for breach of contract. The baked goods retailer moves for summary judgment on liability, and the pastry company moves for summary judgment of dismissal.
Under a written agreement, a pastry company promised to sell its entire output of baked buns at a specified unit price to a baked goods retailer for one year. The baked goods retailer promised not to sell any other supplier's baked buns.
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A is incorrect. Summary judgment would not be appropriate for these facts because the question of whether the pastry company has breached the output contract involves an issue of material fact.
B is incorrect. Again, summary judgment would not be appropriate here. Whether the pastry company breached the contract is not an issue of law.
D is incorrect. While this answer correctly identifies that both motions should be denied, there is nothing in the contract or facts that suggest the pastry company is obligated to share the dog biscuit profits.