Reference no: EM131659880

Question: Right of Assurance. Advanced Polymer Sciences, Inc. (APS), based in Ohio, makes polymers and resins for use as protective coatings in industrial applications. APS also owns the technology for equipment used to make certain composite fibers. SAVA gumarska in kemijska industria d.d. (SAVA), based in Slovenia, makes rubber goods. In 1999, SAVA and APS contracted to form SAVA Advanced Polymers proizvodno podjetje d.o.o. (SAVA AP) to make and distribute APS products in Eastern Europe. Their contract provided for, among other things, the alteration of a facility to make the products using specially made equipment to be sold by APS to SAVA. Disputes arose between the parties, and in August 2000, SAVA stopped work on the new facility. APS then notified SAVA that it was stopping the manufacture of the equipment and "insist[ed] on knowing what is SAVA's intention towards this venture." In October, SAVA told APS that it was canceling their contract. In subsequent litigation, SAVA claimed that APS had repudiated the contract when it stopped making the equipment. What might APS assert in its defense? How should the court rule? Explain.