Rule 240 may no longer exist, but here is a copy of the applicable portion of Continental's Contract of Carriage:
2)Delay, Misconnection or Cancellation
a)When a Passenger’s ticket is affected because of a Schedule Irregularity caused by CO, CO will take the following measures:
(i)Transport the Passenger on its own flights, subject to availability, to the Destination, next Stopover point, or transfer point shown on its portion of the Ticket, without Stopover in the same class of
service, at no additional cost to the Passenger, provided that a Passenger who paid a Coach fare may only be transported on a flight in First Class or Business First Class Service subject to seat availability and if such flight will provide an earlier arrival than CO’s next flight on which coach space is available
Seems pretty clear to me. And, by the way, this was a mechanical delay...not weather delay. Big difference.
As to this being another carrier (Colgan)...may be, but if it looks like a duck, etc.
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