Ag Law – Class #5 Questions See Reserve Reading --Hamilton‟s , Production Contracts Recitation today: Straatman-- recap Zummo …Ellen Slater Potter … Jake Walker Homework #1-- Ag Law ’03 Problem #3 – page 13 Facts: Roy‟s employee, Will, was working around an independent contractor‟s digging machine on Roy‟s Ranch, and Will was severely injured. Will sued the contractor and Roy! During discovery, before the trial, during which Will indicated the machine operator caused the accident! Roy‟s attorney filed a motion to dismiss Roy from the suit. Will objected to the motion to dismiss, arguing that a jury should hear the claim against Roy. Was the court correct when granting the Roy‟s dismissal? Homework #1-- pr.#3, p. 13 Dismissal of Roy from the lawsuit is appropriate. Information obtained during “discovery” of the plaintiff‟s case is a basis for dismissal. Courts are hesitate to dismiss when any factual issue remains, but if there is no factual issue remaining, dismissal is okay. Straatmann Holding: Specific performance for Ken granted. His staying on the farm at the request of Ben was consideration whether or not that was his first choice. Mom admitted that the agreement existed! While the Mo. law may only require partial performance by the party seeking enforcement, Ken had 29 years (since 1961) toward his part of the “bargain.” Parol Evidence Rule In written agreements, the writing is the best evidence of the agreement, and evidence of prior or contemporaneous agreements is not admissible to contradict a term of the writing. In short, incorporate the words to give them effect. Exceptions: ambiguity in the terms, or a dispute as to meaning Zummo Cattle Co. v. Millard, Ct. of Civil Appeals of Tex. ‘72 Action Issue Facts - Applicable law - Holding - Rule - Zummo Cattle Co. v. Millard Action: loss of profits by Zummo Issue: Is there a basis for an exception to the parol evidence rule? Facts: The contract said that Millard was responsible for “all death losses and mysterious disappearances …” (there is no missing term or ambiguity) Zummo Cattle Co. v. Millard Facts: Millard introduced a phone conversation with Zummo to let the “loss limit be 3%” before Millard would agree to the contract But, he didn‟t change the writing he signed. Trial court held for Millard, limiting his liability to 3% for death and mysterious disappearance. Law: Statute of Fraud/Parol evidence rule Zummo Cattle Co. v. Millard Holding: Millard is liable under the death loss clause in the contract -- all losses! Trial court permitted a violation of the parol evidence rule Rule: Parol evidence rule:-- the writing is the best evidence of the agreement, and evidence of prior or contemporaneous agreements is not admissible to contradict a term in the writing. Excused Performance Don‟t have to do what was promised! Generally, performance is excused if conditions have so changed that the parties would not have entered the contract if the changed circumstances existed at the out set. Impossibility, e.g., subject matter is peculiar and has become unavailable Impracticability, e.g., crop dusters only plane is destroyed Frustration of Purpose, e.g., crop to be treated no longer exists Remedies for Breach of Contract Damages Sufficient to make the party “whole” (to get the benefit of his bargain) Guideline: market price-contract price=Damages Liquidated Damages An amount or formula for determining damages stipulated in the contract Must be reasonable to be enforceable “penalties”are not permitted or what appears to be coercive Remedies for Breach of Contract Restitution payment for benefits already received Rescission (an equitable remedy) Cancellation of a contract with restitution, I.e, payment for benefits received. Specific Performance When the subject matter is unique Or, when damages are inadequate Statute of Limitations Statutory limit on the time to bring an action for recovery. To miss the time limit bars the action. In common law, if one who did not seek relief in a “reasonable” time was barred by the doctrine of laches. Statutes of Limitation in Indiana 2 years - personal injury; damage to personal property; wrongful death; and medical malpractice. 4 years - contract for the sale of goods (whether written or oral). 6 years - accounts; oral contracts other than the sale of goods; rent and landlord-tenant disputes; damage to real estate; promissory notes and written contracts for the payment of money. 10 years - An action upon contracts in writing other than those for the payment of money, and including all mortgages - Other than chattel mortgages, deeds of trust, judgments of courts of record, … Uniform Commercial Code (UCC) UCC is a uniform body of law governing major commercial transactions including sales and secured transaction of special interest to agriculture. Also, covered by the UCC are bank deposits and collections, commercial paper(checks and notes) and warehouse receipts and other documents of title. All states, but Louisiana, have adopted the UCC with some small variations. Scope of Article 2 1. All things that are movable: 2. Timber and minerals, if to be removed by the seller, Growing crops & buildings that can be moved without materially harming the real estate, – Animal products while on or in the animal, – Unborn young of animals, – Contracts involving both goods and services if the goods are a predominant factor. Potter v. Hatter Farms, Inc. Ct. of Appeals of Oregon, „82, 641 P. 2d 628 Action: Issue: Facts: Law: Holding: Rule: Potter v. Hatter Farms, Inc. Action: For a contract enforcement by promissory estoppel Issue: Should Hatter be barred on the basis of promissory estoppel from raising the Statute of Frauds (SF) as a defense? Facts: Potter (Pl) hatched and grew out turkey poults for growers. Hatter Farms (def.) finishes the turkeys for food processing companies. Potter and Hatter had discussions in Jan. „79 as to specifics of a sale of 192,000 poults. In June Potter had feelers from others for his poults, but Hatter gave no indication of not wanting the poults Potter v. Hatter Farms, Inc Facts: Hatter‟s agent testified that he told Potter it was unwise to hold the poults for them since the transportation had not been arranged. Potter testifies that he was convinced that Def was still going to buy the poults, and there were no contractual terms to be worked out. In August, Hatter informed Potter they would not take the poults. Potter v. Hatter Farms, Inc Law: Promissory estoppel is a bar to the defense of SF Holding: Oregon UCC does not exclude promissory estoppel as a bar to a SF defense & Promissory estoppel requires proof of: 1) reliance on a promise, 2) a definite and substantial change of position occasioned by the promise, & 3) foreseeability by the promisor, as a reasonable person, the promise would induce conduct of the kind that occurred. Potter v. Hatter Farms, Inc Holding: Contract damage due to estoppel Potter satisfied the above three part test: There was a promise, albeit oral Reliance on the promise, and change in position Hatter, had to foresee Potter‟s predicament Rule: If the pl can prove the elements of prom. Estoppel he or she can defeat the SF defense. UCC - Article 2 2-201- 1. “a writing signed by the party being charged is required for sales of goods for a price of $500 or more.” 2. “merchant’s exception” -- between merchants if within a reasonable time a writing in confirmation of the contract, sufficient against the sender, is received, and t the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received. There are other exceptions. E.g., estoppel, partial performance … Quiz #2 – True or False 1. A contract may be 3. Ordinary negligence enforced without a requires a showing of signed writing if there fault or failure. is partial performance. 4. Contract law will allow 2. An Indiana farmer can written contracts that usually avoid a specify damages in forward cash contract advance of a breach. when there is 5. The “mail box” rule drought in his or her may promote field. “acceptance” of an offer.