Case Scenario:
Grocery has a written contract with Cereal, Inc. to purchase 20 cases of cereal per month at $22 per case. The contract does not state the types of cereal or how the 20 cases will be divided up between Grocery's 20 stores in Any State. After a "twenty-year" flood, Cereal suffers severe water damage in its warehouse. With the exception of Soggy Flakes, Cereal does not have enough undamaged cereal to comply with its Grocery contract. On the day delivery was due, Grocery receives 10 cases of Soggy Flakes at the three stores located in My Town and two stores in Your Town. Twelve days before delivery was due, Grocery had requested, by facsimile that 15 cases containing a variety of cereals be delivered to the five stores listed above with the remaining five cases going to Grocery's warehouse in Corp Town. Grocery wants to reject the shipments of Soggy Flakes and cancel its contract with Cereal.
1) What rights and/or defenses, if any, does Cereal have under contract law?
2) Analyze the remedies available to Grocery and/or Cereal. Explain all answers in detail.