Isaac Contracts to Sell Boyd All of His Requirements of Coal.In

question 70

Essay

Isaac contracts to sell Boyd all of his requirements of coal.In the past,Boyd has required between 1,000 and 1,500 tons of coal per year,but the contract contains no estimate of Boyd's needs.Now,Boyd's needs increase dramatically,and it demands 10,000 tons of coal from Isaac.Is Isaac obligated to sell Boyd this amount?

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Definitions:

Trading Securities Portfolio

A collection of securities bought and held primarily for sale in the short term to generate income on short-term price differences.

Fair Value

The estimated price at which an asset can be bought or sold in an orderly transaction between market participants at the valuation date.

Unrealized Gain

An increase in the value of an asset that has not been sold, thus not yet generating actual profit.

Readily Marketable

Items or securities that are readily marketable can be quickly sold in the market without significantly affecting their price.