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The importance of ensuring the intentions of the parties is clearly spelled out in a prenuptial agreement and subsequent estate planning documents cannot be stressed enough. In the following case, the parties spent years fighting over a decedent’s estate because of unclear language. 

The decedent and his first wife had three children. After the wife’s death, the family experienced “acrimonious intra-family disputes” and litigation involving the wife’s estate. The problems started when the decedent exercised a power of appointment under his late wife’s will. The children squabbled for several years. The family eventually reached a settlement agreement which was read into the court record, reduced to writing, and incorporated into the court’s order enforcing the settlement.

June 9, 2012 | Erika Eckley
The father and his son had a rocky relationship for many years until they made peace and began farming together. The father owned an International 766 tractor.  The tractor was sitting out in a field, unused at the time the father purchased a newer model. After the son repaired the old tractor, his father allowed him to use the tractor for haying and some farming. The tractor eventually was put out to pasture once again where it remained for several years. In the meantime, the father contracted cancer and did not see his son for some time due to his health issues.

In 1987, a trust was created upon the death of the plaintiff’s grandfather. At the time of his death, the grandfather’s wife received one-half of the real estate owned by the grandfather directly and the other half was conveyed into a trust. The wife received the income from the trust during her life with the grandfather’s daughters as residual beneficiaries upon her death.

In order for a will to be executed, there are several actions that must be taken. The testator must put the purported will in writing and state that the document is her declared will. The document must be signed by the testator, which must be witnessed by two persons who have no claim to anything in the will, are of legal age and mental capacity, and are witnessing the signing of will at the request of the testator. The witnesses must also sign the will in front of each other and in the presence of the testator.

(Note:  On August 8, 2012, the Iowa Court of Appeals revised their earlier opinion regarding the amount of the inheritance tax reimbursement. The earlier opinion was vacated and the August 8, 2012 opinion replaces it.) 

August 31, 2012 | Erika Eckley

In Iowa, marital property is to be equitably distributed upon the dissolution of a marriage. Inherited property, however, is normally awarded to the individual spouse who owns the property and distributed to the individual independent from the equitable distribution process. But, under Iowa law, the court does have the power to require distribution of inherited property if equity demands it in light of the particular circumstances of the spouse or children. Several factors are considered, including the following:

June 27, 2006 | Roger McEowen

Installment sale contracts are a popular method to sell real estate, especially farmland. One popular feature is that the downpayment is usually low, quite often less than 20 percent of the purchase price. Beginning farmers and others with minimal amounts of cash like that. But, to be a valid contract all the requirements to have a binding contract must be satisfied - including the requirement that the seller has the authority to convey the real estate. That was the issue in this case.

Many lawsuits have been filed over land deals that have gone bad. A lot of those involve buyers that get cold feet and renege on the deal.   But, what if the seller tries to back out after agreeing verbally to a particular party’s offer to purchase the property? That’s what happened in this case, and it illustrates a fundamental rule of contract law - contracts for the sale of real estate must be in writing to be enforceable. That’s known as the Statute of Frauds. It’s an old rule that date backs to 1677 in England.

February 20, 2007 | Roger McEowen

Iowa law requires certain disputes involving farmers to be submitted to mediation before filing a court action. Disputes subject to mandatory mediation are those involving contracts for the care and feeding of livestock. In this case, the parties entered into an oral contract for the raising and feeding of hogs. The defendant purchased feeder hogs and placed them with the plaintiff to be cared for until they reached market weight.

It’s always a good idea to reduce farm leases to writing. Unfortunately, most farm leases in Iowa (and elsewhere) are oral. But, even if the lease is in writing it is critical to make sure that the lease terms are clear and that both the landlord and the tenant have a common understanding of what the lease terms mean. This case drives those points home.

September 26, 2007 | Roger McEowen

A contract for the sale of goods for $500 or more is generally not enforceable unless there is a written agreement signed by the party against whom enforcement is sought.  But, there are exceptions to the general rule.  For example, under the “Merchant’s Confirmatory Memo Rule,” oral contracts between merchants are enforceable if a written confirmation of the oral agreement is received within a reasonable time, and the recipient doesn’t object to the writing within ten days. The rule often comes into play in the context of grain sales between buyer and sellers of grain.

December 30, 2007 | Erin Herbold

Contracts involving an interest in real estate must be in writing to be enforceable.  That rule is known as the “Statute of Frauds.”  But, there are exceptions to the rule.

The defendant, a real estate developer, purchased 120 acres to develop and resell as residential lots.  The plaintiff purchased a multi-acre lot from the plaintiff for $35,000.  Based on the defendant’s representation, the plaintiff believed that the southern boundary of the lot was located along a terrace, but that later proved to be incorrect with the effect that the plaintiff actually owned about one acre less than what the plaintiff originally thought she had purchased.  That created a problem – the plaintiff would have to change her septic system laterals and relocated her house on the

Consideration is something that is done or promised in return for a contractual promise.  It’s a central concept in the common law of contracts, and is required for a contract to be enforceable.  Essentially, consideration is what must be given up by each party when making an agreement.  It may be means of doing or not doing an act or simply promising to do or not do an act.  It’s a benefit to one party and a detriment to the other party.  In general, for a contract to satisfy the requirement of consideration, the contract must fulfill three elements:  (1) there must be a bargain regarding

With certain purchases, buyers cannot determine whether the purchased items are defective until sometime after the items are purchased and used.  For example, when a farmer buys seed, there is no way that the farmer can determine if the seed is defective (such as by failing to germinate properly) until after the seed has been purchased, planted and begins to produce a crop.  By the time the farmer realizes that the seed is defective, substantial sums may have been expended to not only buy the seed, but also to plant the seed, spray chemicals for weed control and cultivate the soil.

March 17, 2008 | Roger McEowen

In this case, a California couple signed a contract to buy an Iowa home.  The purchase of the Iowa home was not contingent upon the buyer’s selling their California home or obtaining acceptable financing.  The contract provided for inspection of the Iowa home within 10 days, but the buyers waived their inspection right by not filing a written repair request within the ten-day timeframe.  The contract explicitly stated that if the buyers waived their right to inspect, the sellers were not responsible for repairs.  Shortly after signing the contract, the buyers e-mailed the sellers’ real esta

November 21, 2008 | Roger McEowen

A contract involving an interest in land must be in writing to be enforceable.  The rule is known as the “Statue of Frauds” and it applies to contracts for the sale of real estate as well as real estate leases.  With a lease, the interest in land that is involved is not an ownership interest, but possession – the tenant gets exclusive possession of the leased premises for the term of the lease.  So, a farm lease must be in writing to be enforceable.  But, there are a couple of notable exceptions.  Perhaps the biggest of the exceptions is that the rule doesn’t apply to contracts where perfor

January 5, 2009 | Roger McEowen

Oral farm leases present many problems, not the least of which is the question of what happens when either the landlord or the tenant dies during the term of the lease.  This is another reason why it’s always best to get the terms of a farm lease in writing.  But, that didn’t happen here and the landlord died during the lease term.  A lawsuit among family members was filed to sort out the mess – with a very predictable outcome.

Under Iowa’s Uniform Commercial Code (Iowa Code §544.2713(1)), the measure of damages for non-delivery of goods by a seller under a written contract is “the difference between the market price at the time when the buyer learned of the breach and the contract price.” In this case, a grain elevator and grain storage company entered into a written lease agreement, whereby the elevator would rent extra grain storage space from the storage company. Under the lease, the storage company would provide all labor at the facility and would be solely responsible for any grain shortages.

In Iowa, if an agreement is said to be signed by an adverse party in a legal proceeding, that signature is deemed to be genuine unless the adverse party can support their denial of the signature’s authenticity with credible evidence. In that event, the burden shifts to the party claiming the signature is a fake to demonstrate its validity. In the event that a handwriting expert is called in to examine the signature, it is up to the trial court to determine their credibility. This analysis is particularly important in the case of a promissory note or check. 

In many cases involving breach of contract where the amount of damages is an issue, courts seek an outcome that will put the contracting parties in the position they would have been in had the contract been performed according to its terms.  Reaching that outcome often requires a thorough examination of the evidence.  

The dispute in this case goes back to 2002, when a brother and sister entered into a contract for the sale of farm land. In an attempt to help her brother, a sister purchased 150 acres of land from her brother and his wife, subject to her brother’s option to repurchase the land by July 1, 2007.

A key element of contract law is that the terms in a written agreement control.  While limited situations can arise that allow for equitable arguments to be made that might allow conduct contrary to written contract terms, that’s the clear minority of situations.  Those principles were involved in this case.

September 22, 2009 | Erin Herbold

In this case, the buyer of a tractor issued a check for $22,000 to the seller in 1997. The parties agreed, orally, that the seller would not cash the check for 30-60 days and that if the funds were not available within 30 days the buyer would owe 15% interest compounded annually.  Ultimately, the check was not honored. Two years later, the parties entered into a written agreement that allowed the buyer to purchase the tractor at the same purchase price plus interest. Further, the seller agreed to fix the air conditioner in the tractor.

A person that is not a party to a contract may sue a contracting party based on their contract only if the outside party can show that they were an intended beneficiary of the contract.  This concept is known as “privity” - if the contracting parties intended to convey a benefit to another party, then the benefitted party may be deemed in privity.  The privity concept was involved in this case.

December 28, 2009 | Erin Herbold

When negotiating a contract, the parties must ensure that “adequate consideration” has been furnished by the parties for the contract to be validly executed.

Here, the parties entered into a written farm lease of 252 acres for a one-year term. Though the written lease specified a one-year term, the tenant continued to farm the land for the following two crop years. On Aug. 6, 2008, the landlord served notice of termination on the tenant that his tenancy would terminate at the end of the calendar year. The tenant replied by letter, stating that the landlord had not complied with the requirements of Iowa Code §562.5, which requires that the date of termination of a farm lease be specified as March 1 of the following year. 

Farmers routinely engage in the sale of older farm equipment. Having a solid background knowledge of exposure to liability for the seller is a good way to avoid a lawsuit. In this personal injury suit, the plaintiff was seriously injured while using the dump truck he purchased from defendants eight years earlier. The defendant acquired the older dump truck, previously used for grain hauling, in 1995. In an effort to improve his line of equipment, the defendant moved the truck to inside storage and did not use it for two years.

A fundamental principle of contract law is that a party that accepts the delivery of nonconforming goods must pay the full contract price. That’s also the result under Iowa’s version of the Uniform Commercial Code.  Farmers that are merchants are generally subject to the Uniform Commercial Code. 

March 15, 2010 | Erin Herbold

In this case, the parties divorced after 39 years of marriage.  Before their marriage, the couple executed a pre-marital agreement.  Both parties were represented by legal counsel, and it was agreed that the real property in the possession of each party would remain separate property upon a divorce. There was no statement of the real property ownership attached to the document, but both parties agreed that the husband owned 160-acres of farmland before the marriage. Years later, the elderly husband went to the nursing home and was scheduled to be released in May 2008.

A fundamental principle of contract law is that a valid contract requires a “meeting of the minds” between the contracting parties concerning the essential terms of the contract.  There must be mutual assent – the intent of the parties is key.  If the offeror has clearly manifested a willingness to enter into a contract in such a way that the other party, the offeree, knows that assent is all that is necessary to cement the deal, and the offeree accepts, the requisite mutual assent exists.  But, if the offeree changes the terms of the offer in their acceptance, does a contract exist?  That

In Iowa, the county assessor values each item of taxable property in the county. Property taxes are assessed on January 1st for taxes for the fiscal year starting July 1st and ending June 30th of the following year. For example, a January 1, 2010 assessment date is for the 2010-2011 fiscal tax year, which starts July 1, 2010, and ends June 30, 2011. Real estate taxes are assessed in arrears, meaning that taxes for the previous fiscal year become due on the first day of the current fiscal year. After the assessment, the taxpayer has an opportunity to protest in front of the board of review.

July 5, 2010 | Erin Herbold

In this case, a corporation owned agricultural land with the defendant being the sole stockholder until 2006 when the stock was sold to a third party at sheriff’s sale. After the sale, the defendant remained on the land claiming that he was the tenant under an oral lease.  In 2007, the corporation and its new owners served the defendant with a notice of termination specifying that the lease would terminate March 1, 2008.  But, when March 1passed, the defendant refused to give up possession of the land.

This case involved the issue of how much detailed financial information a person suing to rescind a real estate contract may obtain during the discovery process.  In the end, the case turned on the question of what financial information was really relevant regarding the assets and income of the purchasers. 

Many Iowa farmers use standard written forms, sometimes adding additional terms when executing farm leases in Iowa. When clauses conflict in a farm lease, how do the courts determine the parties’ intent in the event of a dispute? What happens in the event of a perpetual lease? This case demonstrates the importance of executing a clear and concise written farm lease agreement and addresses the problem of perpetual farm leases. 

August 31, 2010 | Erin Herbold

In this case, the Iowa Court of Appeals was faced with the task of determining the parties’ respective rights to a home purchased in 1987. The original purchaser bought the home and lived in it for only a year until he moved to Florida. The original owner and an acquaintance entered into an agreement at that time. It consisted of a single sentence, “I [home owner] agree to put [the residence] on contract with [acquaintance] on Feb. 1, 1989.” Subsequently, the new resident began paying the mortgage, insurance and property taxes.

A party that is trying to recover for “lost profits” must prove damages to a “reasonable certainty.”  In the context of contract law, it involves an estimation of one party’s lost profit caused by the contract-related breach of the other party.  If a “new business,” is involved the courts are often hesitant to award damages for “anticipated lost profits” on the basis that they are largely speculative.  A recent opinion by the Iowa Court of Appeals discusses the concept and its application under Iowa law. 

September 24, 2010 | Erin Herbold

The plaintiff fell and was injured on an ice-covered parking lot. She sued the property owner and the snow removal contractor.

In this case, a farmer obtained a variable interest ag loan from a bank in 2000. The bank and farmer entered into a loan agreement, whereby the bank would lend $250,000 to the farmer at a discounted interest rate of 7.65% (4% less than the bank’s base rate). The parties also entered into a separate “interest assistance agreement” under which the Farm Services Agency agreed to reimburse the bank its 4% discount in exchange for the bank passing on the discount to the farmer.

November 15, 2010 | Erin Herbold
A farm couple owned farmland jointly, but divorced in 1995 with each of them receiving one-half of the farmland.  Before and after the divorce they rented the land to their son for farming purposes.  In 2002, they each signed an oil and gas lease in favor other another son. The lease was recorded. Some months later, the father created a revocable trust, naming himself trustee and a cousin as successor trustee. He transferred his land to the trust.

In 2006, a plastic products manufacturer purchased the business assets of a competitor. As part of the transaction, the buyer inherited the seller’s business relationship and contracts with a bottling company. During the next few years, the manufacturer continued to make products specifically engineered for the bottling company. At some point, the bottler became dissatisfied with the manufacturer for not keeping extra inventory on hand. 

March 1, 2011 | Erin Herbold

Here, buyers and sellers entered into a purchase agreement for an 80-acre parcel of farmland in 2003. Included in the purchase agreement was a clause governing “contingencies.” The parties agreed that the buyers’ performance of the purchase agreement was contingent on the sellers entering into a separate “option agreement” with the buyers- an option granting the buyers the first right to lease and purchase an additional 331 acres from the sellers.

March 1, 2011 | Erin Herbold

Many young farmers attempt to enter into leasing arrangements with established farmers in the area to start their own farming operations.  That can be beneficial not only to the young farmer, but, if certain conditions are met, can qualify the landlord for the Iowa Beginning Farmer Tax Credit.  In this case, the owner of an established farming operation agreed to help a younger farmer get started in the business by entering into a farming relationship whereby the younger farmer would get 25% of the farm income and pay 25% of the farm expenses.

March 12, 2011 | Erin Herbold

In 2004, three individuals purchased the corporate stock of a scrap metal storage yard. Each party signed a promissory note for the stock purchase and a stock restriction agreement which set parameters for selling or transferring the stock.

May 11, 2011 | Erin Herbold

Here, a trustee (plaintiff in this case), contracted to supply the defendant company with seven railcars of organic corn.  In 2007, the plaintiff loaded a railcar with corn. During transit, nearly 500 bushels of corn leaked out due to improper loading. The defendant believed the plaintiff was responsible for the lost corn and only paid for the amount delivered. When the plaintiff received the payment, he notified the defendant that they were in breach of contract for failure to pay the full amount and refused to deliver the other six railcars of corn. 

July 29, 2011 | Erin C. Herbold-Swalwell

In 2006, an investment company (defendants in this case) entered into negotiations for the sale of a parcel of real estate with a couple. The couple began constructing a home on the parcel, intending the home to become their homestead upon completion. The investment company was also the sellers’ lender. Before the sale was finalized, the couple met with a contractor and contracted with them for labor and materials for the interior of the home.

July 29, 2011 | Erin C. Herbold-Swalwell

A landowner signed a contract with a logger to cut down mature trees on his property.  The landowner owned some of the property outright, but on some of the property the landowner owned it as a co-tenant with his four children. The logging contract specified that the landowner would receive 60% of the profits from most of the trees and the logger would receive 40%.  For walnut trees, however, the owner would receive 65 percent and the logger 35 percent. Further, the agreement provided that the owner’s children would receive 5 percent of the owner’s proceeds.

A residential subdivision was being developed in the City of Forest City. A civil engineering firm and its employee were contracted to provide surveying and planning, street and utility design, and to prepare a grading plan to establish grades and elevation on the street for the project. The defendant, a construction company, was contracted to do all of the grading, paving, and utility improvements on the project. The contract required that all services be completed in a workmanlike manner. 

Unjust enrichment can occur when one party unfairly benefits from the investment of another party.  In such situations, the law looks to equitable principles to find a fair solution.

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