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Hard Drive Computers, Inc. (HDC) entered into a written agreement with Computers Memories, Co. (CMC), in which CMC agreed to supply all of HDC’s requirements for 1-megabyte static RAM devices for a three-year period. The contract specified that HDC would pay $10 per device during the first year, $9 per device the second year, and $8 per device the third year. HDC was a startup company which had no prior record on which to base estimates of the number of devices needed. CMC has been in existence for two years.
During the first eight months of the HDC-CMC contract, HDC’s orders for memory devices ranged from 400 to 600 per month. At the beginning of the ninth month, HDC informed CMC that it had been purchased by CompWorld, Inc. (CWI), a very large corporation that also manufactures computers, and that the HDC-CMC contract had been assigned to CWI as part of that transaction. When CWI ordered 650 memory devices for that month, CMC notified CWI that it considered the contract rescinded and would supply no more memory devices.
What recourse, if any, does CWI have against CMC?
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Under what situations can a contract not be assigned? Think about whether HDC’s duties are significantly altered due to the assignment.
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