A recent trial court decision in Iowa involving hedge-to-arrive contracts has focused attention on “adequate assurance” under Article 2 of the Uniform Commercial Code. The run-up in grain prices in late 995 and early 1996 caused some elevators -- which were meeting the margin calls and paying the roll charges -- to become concerned about the ability of the producer involved to perform under the contract and to meet the accrued obligations on the contract. But the way demands for adequate assurance are handled can have important implications for the parties to the contract.



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