When Is a Party Allowed to Request Adequate Assurance of Performance,and

question 125

Essay

When is a party allowed to request adequate assurance of performance,and why should a party not be required to simply perform the contract and sue for damages if the other party does not perform?

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Definitions:

Required Rate

A rephrased definition: The minimum return rate required by investors to consider investing in a particular asset or project.

Coupon Interest Rate

Stated rate of interest on a bond, defined as the coupon payment divided by the par value.

Market Value

Market value is the current price at which an asset or company can be bought or sold in the marketplace, reflecting the value the market places on it.

Call Provision

Gives the issuing corporation the right to call the bonds for redemption. The call provision generally states that if the bonds are called, the company must pay the bondholders an amount greater than the par value, a call premium. Most bonds contain a call provision.