Can I be held to a contract to deliver my farm product when the processor is paying below the cost of my operation?
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Can I be held to a contract to deliver my farm product when the processor is paying below the cost of my operation?
I am a cranberry grower. I sell my cranberries to a handler locally who then uses them mostly for their own product and also sells them to their customers. This handler makes everyone sign a 3 year evergreen contract that states if i want out i have to give them a letter of notice this year and still deliver to them for the next 3 years before I am free. This handler is dropping
the price they pay to us because they can get away with it since we are locked in. They forcasted one price that I banked on this year but, now they are cutting that price drastically. Can someone hold me to a contract when they are paying below my breakeven for the last 4 years, especially when there are others out there that are paying better.
Asked on July 27, 2016 under Business Law, Wisconsin
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
The enforceability of a contract is not affected by whether the contract is good or bad (even disasterous) for you, and you can be held to contracts below your breakeven, on which you lose money. The economic conditions or your finances are irrelevant here. You can only escape the contract if the other party breaches or violates it in some material, or important way (that material breach will then let you treat the contrat as terminated) or if there is some clause or provision in the contract itself that lets you get out of it, and you fully comply with all that provision's requirements.
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