Tony Enters into a Contract with Joseph to Supply His

question 52

Essay

Tony enters into a contract with Joseph to supply his entire output of guavas from each season at the then current market price.Joseph plans to use the guavas to make jams.However,the contract did not contain any clause as to when it can be terminated.Tony gave a one-year notice period to Joseph prior to termination of the contract.Joseph intentionally did not make any arrangements for himself to acquire guavas from elsewhere.When Tony expressed his inability to supply Joseph the guavas after one year,Joseph sued Tony for breach of contract.Is Joseph's approach justified?

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Definitions:

Unadjusted Trial Balance

A summary listing of the titles and balances of accounts in the ledger prior to the posting of adjusting entries.

Account Title

The name given to an account in the ledger to identify the type of transactions it records, such as "Sales Revenue" or "Accounts Payable."

Unearned Revenues

Money received by a company for goods or services that have yet to be delivered or performed.

Current Assets

Resources that are anticipated to be turned into cash, disposed of, or utilized within a year or throughout the regular business cycle.