A produce wholesaler offers to buy all of a farmer’s corn for two years. The farmer accepts. Six months later the wholesaler repudiates and buys from another source. Is the farmer likely to prevail on a breach claim?

• A. No, because the contract allows the wholesaler to switch sources.
• B. Yes, because the contract must be performed in good faith.
• C. No, because the farmer’s corn was not suitable.
• D. Yes, because the farmer’s performance was complete.

Answer: (B)

The principle at work is the duty of good faith in performance under a sale-of-goods contract. When a buyer promises to purchase all of the farmer’s corn for two years and then repudiates six months in by buying from another source, that is a breach: the buyer has refused to perform its obligation and cannot simply switch suppliers. Under the UCC, contracts for the sale of goods impose an obligation of good faith in carrying out the terms, so repudiation undermines that obligation and allows the non-breaching party to sue for breach and recover damages. The fact pattern does not give the farmer a defense based on the corn’s suitability, nor does it show the farmer has already completed all required performance for the two-year term; the farmer still had obligations to deliver or the buyer to purchase under the contract. Therefore the farmer is likely to prevail because the wholesaler’s repudiation violates the duty to perform in good faith.