On August 1, Selwyn Seller and Buena Buyer entered into a contract under which Buena agreed to buy Selwyn's home for $500,000. The contract provided that the transaction would close on September 20. At the time of executing the agreement, Buena paid a down payment of $50,000 into escrow. The contract made no mention of Buena's means of financing the purchase, and it had no financing contingency. However, Selwyn knew that Buena planned to obtain a loan, secured by a mortgage on the property, for the remaining $450,000. On August 25, Selwyn's real estate agent told him that Buena had applied for loans from two different banks and that both applications had been declined. The real estate agent had also discovered p. 781that the reason for denial of the applications was that Buena has a poor credit history. Selwyn is concerned that Buena will not be able to obtain the financing necessary to buy the house and will be unable to close, thereby breaching the contract. If this is so, Selwyn would prefer to put the house back on the market immediately, rather than wait until September 20.

(a) Does Selwyn have the right to declare that Buena has repudiated the contract?

(b) If not, does Selwyn have grounds to demand an assurance of performance?

(c) If Selwyn is entitled to an assurance of performance, what demand would be both adequate and legally permissible