Court Opinion

ID: 9462589
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:44:44.802571+00
Date Added: 2024-06-11T17:37:39.876757
License: Public Domain

CUMMINGS, Circuit Judge
(concurring).
Although I agree with the result reached in the majority opinion, I differ with the reasoning. Reasonable men could certainly conclude that PDM had legitimate grounds to question Brookhaven’s ability to pay for the water tank. When the contract was signed, the parties understood that Brook-haven would obtain a loan to help pay for the project. When the loan failed to materialize, a prudent businessman would have “reasonable grounds for insecurity.” I disagree that there must be a fundamental change in the financial position of the buyer before the seller can invoke the protection of UCC § 2-609. Rather, I believe that the Section was designed to cover instances where an underlying condition of the contract, even if not expressly incorporated into the written document, fails to occur. See Comment 3 to UCC § 2-609. Whether, in a specific case, the breach of the condition gives a party “reasonable grounds for insecurity” is a question of fact for the jury.
UCC § 2-609, however, does not give the alarmed party a right to redraft the contract. Whether the party invoking that provision is merely requesting an assurance that performance will be forthcoming or whether he is attempting to alter the contract is a mixed question of law and fact, depending in part upon the court’s interpretation of the obligations imposed on the parties. In this case, PDM would have been assured only if significant changes in the contract were made, either by receiving Betke’s personal guarantee, by attaining escrow financing or by purchasing an interest in Brookhaven. The district court could properly conclude as a matter of law that *584these requests by PDM demanded more than a commercially “adequate assurance of due performance.”