Magnet Resources, Inc. v. Summit MRI, Inc.
Superior Court of New Jersey, Appellate Division
723 A.2d 976 (1998)
Magnet Resources, Inc. (Magnet Resources) (plaintiff) agreed to provide MRI maintenance services to Summit MRI, Inc. (Summit) (defendant) for advance monthly payments, but Summit's payments were frequently late or dishonored; after Summit requested additional out-of-contract services while owing $35,000 and promised to pay the balance by week's end, it still had not paid a week later, prompting Magnet Resources to refuse further services and formally suspend performance pending payment or adequate assurance. Summit then cancelled the contract entirely; Magnet Resources sued for breach and won $492,320, while Summit's counterclaim won $18,470, and both parties appealed.
Whether, generally, a party may suspend performance under a contract while awaiting adequate assurance by the other party.