Clark v. Wallace County Cooperative Equity Exchange
26 Kan. App.2d 463, 986 P.2d 391 (1999)
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Rule of Law:
A seller's contractual duty to deliver a quantity of crops is not excused under the UCC doctrines of casualty to identified goods (§ 2-613) or commercial impracticability (§ 2-615) due to crop failure, unless the contract specifically identifies the crops as coming from a particular tract of land. Absent such a provision, crop failure is a foreseeable risk assumed by the seller.
Facts:
- In January 1995, Ray C. Clark, a farmer, entered into a written agreement to sell 4,000 bushels of corn to the Wallace County Cooperative Equity Exchange (Coop).
- The contract stipulated that the corn was to be delivered after the crop was harvested later that year.
- The agreement did not specify that the corn had to be grown on Clark's land or any other particular piece of land.
- In September 1995, a freeze occurred which severely damaged Clark's corn crop.
- As a result of the crop damage, Clark was only able to raise and deliver 2,207.41 bushels of corn to the Coop.
- The Coop accepted the partial delivery but withheld $1,622.97 from Clark's payment to cover the cost of the undelivered portion of the corn.
Procedural Posture:
- Ray C. Clark filed a lawsuit against Wallace County Cooperative Equity Exchange in a Kansas trial court to recover $1,622.97.
- The trial court entered a judgment in favor of the Coop.
- Clark, as the appellant, appealed the trial court's decision to the Kansas Court of Appeals.
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Issue:
Does a farmer's partial crop failure due to a freeze excuse their contractual obligation to deliver a specific quantity of grain when the contract does not identify a specific parcel of land on which the grain was to be grown?
Opinions:
Majority - Lewis, J.
No. A farmer's partial crop failure does not excuse their contractual obligation to deliver grain if the contract does not identify the specific land for the crop. The court reasoned that UCC § 2-613 (Casualty to Identified Goods) does not apply because the goods—4,000 bushels of corn—were not 'identified when the contract is made.' Without a contractual provision tying the delivery to a specific parcel of land, any 4,000 bushels of corn would satisfy the agreement. The court also rejected the argument under UCC § 2-615 (Commercial Impracticability), holding that performance was not objectively impracticable, only subjectively so for Clark. Objective impracticability means 'the thing cannot be done,' and since corn was available from other sources, performance was possible. Furthermore, a freeze is a foreseeable contingency for a Kansas farmer, and by failing to specify the source of the grain in the contract, the seller assumes that risk.
Analysis:
This decision solidifies the allocation of risk in forward grain contracts in Kansas, placing the burden of crop failure on the farmer unless the contract explicitly states otherwise. It establishes that for a farmer's performance to be excused due to crop destruction, the goods must be specifically identified in the contract as coming from a designated source. This ruling provides stability for grain buyers and the agricultural market by ensuring that contracts for generic goods are fulfilled even if the seller's own source of supply fails. Consequently, it incentivizes sellers who wish to limit their liability to do so through express contractual language.
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