Uncertainty as a Reason to Suspend Performance

The best way to understand issues about uncertainty is to begin with UCC § 2-609.

Under § 2-609, if (1) a party has reasonable grounds thinking that the other party will not fulfill its contractual obligations, then: (2) that party may demand in writing adequate assurance of performance, and (3) if is commercially reasonable to do so, (4) it may suspend its performance (5) until it receives the requested assurance.

The following flow chart summarizes the rule:

The common law is similar (but not exactly the same). We illustrate § 2-609 with the (relatively recent) case of Land O'Lakes, Inc. v. Fredjos Enterprises, Ltd., and the common law with the classic case of Hathaway v. Sabin. We begin with Land O'Lakes.