Brizon, a toy company enters into a five-year agreement with Toys Paradise (TP), a toy shoppe. The agreement states that Brizon
is to provide all the toys required by the distinguished shop at a fixed rate. During the first 3 years of the contract, Brizon uses its excess capacity to meet-up with the anticipated requirements and delivers between 1.25-1.5 million toys to TP. However, in the 4th year of the agreement, TP wants Brizon to deliver approximately twice as many toys so that the toys can be used at other outlets owned by TP. In such a case: a. Brizon may be sued by TP if it does not comply.
b. Brizon need not provide the required amount of toys.
c. Brizon has to provide the required amount of toys by putting extra charges.
d. Brizon can claim that the contract was always void.
a. Brizon may be sued by TP if it does not comply.
Explanation:
As the contract between the two companies stated that Brizon must supply all toys required by Toys Paradise at a fixed rate, and that fee has already been established and accepted by both companies, Brizon must meet the requirement for more toys by Toys Paradise, even if this implies a higher production cost, while the contract is valid.
Thus, if Brizon does not comply with its part of the agreement, it could be sued by Toys Paradise and will likely lose the process.
