Ag Law – Class #5
 Questions
 See Reserve Reading --Hamilton‟s , Production
   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
Homework #1-- pr.#3, p. 13
 Dismissal of Roy from the lawsuit is
 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.

 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
 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
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
 Exceptions:
    ambiguity in the terms, or a dispute as to
Zummo Cattle Co. v. Millard, Ct. of
Civil Appeals of Tex. ‘72

     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
  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
 Impossibility, e.g., subject matter is peculiar and has
  become unavailable
 Impracticability, e.g., crop dusters only plane is
 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
 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
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
 Also, covered by the UCC are bank deposits and
  collections, commercial paper(checks and notes)
  and warehouse receipts and other documents of
 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
  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
 Issue: Should Hatter be barred on the basis of promissory
  estoppel from raising the Statute of Frauds (SF) as a
 Facts: Potter (Pl) hatched and grew out turkey poults for
   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
   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
                                  “acceptance” of an

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