9. Can the baked goods producer legally reject the goods?

D is correct. Generally, all contractual rights may be assigned. At common law, requirements and output contracts were not assignable. Under Article 2 of the UCC, however, requirements and output contracts are assignable as long as the assignee does not disproportionately alter the contemplated quantity. Here, this contract is governed by Article 2, as it is for the sale of goods. The miller tendered the first installment in compliance with the original contract between the flour wholesaler and the baked goods producer. Therefore, the baked goods producer must accept the goods.

A is incorrect. A party may perform his duty through a delegatee unless the other party has a substantial interest in having the original party perform the contract. Although assignment of a requirements contract may potentially affect the burden of the seller in certain cases (such as where the assignee has substantially different requirements than the assignor), courts will still uphold the assignment of such contracts because the UCC rules on requirements contracts impose reasonably objective standards of good faith in specifying requirements. In any event, the assignment to the miller, will not have such an effect, because the party assigning its contract is the seller. Because the miller is comparable to the flour wholesaler in terms of reputation and experience, the baked goods producer should not have a particular interest in having the flour wholesaler perform the contract.

B is incorrect. Performance by the delegatee is sufficient.

C is incorrect. Under the UCC, general language of assignment of a contract will be construed as a delegation of performance as well as an assignment of rights.