Bolin Farms v. American Cotton Shipper Association Plaintiffs: Bolin Farms, (11) cotton farmers Defendant: American Cotton Shipper Association


Procedural History: The plaintiffs request declaratory judgment annulling the cotton sales contract, while the defendants request that the contracts be upheld and enforceable. Facts: A contract was made between the plaintiffs and defendants where the plaintiffs obligated themselves to sell and deliver their cotton. The defendants agree to purchase whatever was planted by these farmers on specific acreage at a price agreed upon within a specific time period, irrespective of what the price might be at harvest time. Meanwhile, the price of cotton skyrocketed to at least double the price agreed upon. Issue No.1: Should a contract for the advance or forward sale of a crop product be enforceable when the price of the crop unexpectedly skyrocketed after the signing of the contract due to unforeseeable events? Summary of Arguments: The plaintiffs argue that the contract they made was for a reasonable price, at current market value. They had no way of knowing the market price would increase by more than double. They feel they should not be bound to a contract they made since the circumstances changed unforeseeably . The defendants have cited (13) cases that arose regarding the enforceability of contracts for the sale of cotton due to the unexpected rise in the price. In each, validity of the contracts has been upheld. Holding/Rule: The contract's validity and enforceability was upheld.

Reasoning: The contract was made to limit the risks to the farmers associated with growing and selling their crops. By firm forward selling, the farmer shifts many of his risks to the buyer. The farmer guarantees neither quality nor quantity. In this way the farmer is certain they will sell whatever is produced. The contract was created as a safeguard for the farmers, so it cannot be void just because circumstances changed that make the contract unappealing. If the price had gone down, the farmer would have been paid what was in the contract and so gave up this risk. Judgment/order: The US District court upheld the validity of the contract, and dismissed the plaintiff's plea to void the contract. Promise is an undertaking or commitment. Contract formation Mutuality UCC art2 refers top transactions of movable goods Louisiana has not adopted UCC Force majour (major event) clauses Excuses you from performance (now includes terrorist attacks) Sale of food in restaurant not covered under UCC because of element of service