PC Corp Entered into a Contract with KPL University (KPLU) to to Supply

question 2

Essay

PC Corp. entered into a contract with KPL University (KPLU) to supply 500 PCs for use in KPLU's new computer facility. A week before the PCs were to be delivered, KPLU indicated that it would not go through with the purchase. PC Corp. immediately stopped assembling the computers for KPLU and sold the already assembled computers to another buyer. Three days later, KPLU decided to go through with the purchase and asked PC Corp. to deliver the 500 PCs on the delivery date as agreed in the contract. Is PC Corp. obligated to deliver the PCs as required by the contract? Why or why not?

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Bank Notes

Paper money issued by a central bank, constituting a common form of legal tender in many economies around the world.

Operating Activities

Activities that constitute the primary or main activities of a company, including production, sales, and delivery of goods and services.