Brandon Krajewski and Patrick Taylor Write “Protecting Against an Impending Supply Chain Breach of Contract” for SupplyChainBrain
Brandon Krajewski and Patrick Taylor, both Milwaukee-based partners in the Quarles & Brady Litigation & Dispute Resolution Practice Group, wrote an article for SupplyChainBrain on ways to protect against an impending supply chain breach of contract. The article emphasizes that purchasing and sales executives should be familiar with the Uniform Commercial Code (UCC), which outlines ways to protect against an impending supply chain breach of contract for the domestic purchase of goods.
Krajewski and Taylor discuss anticipatory repudiation and adequate assurance of performance, which are relevant in situations when an executive must protect against an impending supply chain breach of contract. They also provide a hypothetical situation where the concepts are implemented.
An excerpt:
Sometimes a breach of contract by a supplier is completely unexpected, but other times you might see it coming weeks or months in advance, and be left wondering about your options.
For this reason, it’s important that purchasing and sales executives be familiar with the Uniform Commercial Code (UCC), which answers this question for most contracts for the domestic purchase of goods. The relevant UCC concepts are known as anticipatory repudiation and adequate assurance of performance.
Imagine that six months ago, you (an employee of Alpha Corp.) signed a contract committing Alpha to purchase all of its widgets from Xero Corp. Xero committed in the contract to supply all of Alpha’s widgets for five years. While reading the news this morning, though, you saw that Xero announced it’s shutting down its business division responsible for manufacturing the widgets. You need the widgets to make your own products, and so you immediately start to wonder: What are your options? Despite the long-term exclusive supply contract, can you immediately start purchasing the widgets from another supplier? Or do you have to keep purchasing from Xero until it actually misses a shipment? The answer often lies in Sections 2‑609 through 2‑611 of the UCC.