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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.
HDC assigned its contract to CWI, and upon learning of this, HDC, CWI and CMC executed another written agreement which provided, in full: “In the requirements contract previously executed between HDC and CMC, the parties hereby agree that CWI shall be substituted in place of HDC.” Three months later, CWI notified CMC that its monthly requirements for memory devices would be 200 because it had purchased an additional 800 devices for the upcoming month from Memories of China.
Under these circumstances, does CMC have any recourse against HDC?
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Did HDC take any action to cut off its liability? If so, what?
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