Refusing Delivery of Soybeans Repudiated Contract

July 14, 2023 | Jennifer Harrington

On July 13, 2023, the Iowa Court of Appeals held that a soybean buyer repudiated the contract when it repeatedly delayed and prevented delivery of soybeans from the farmer. The contract did not specify a time of delivery, but customary practice created an implied term within the contract that prevented the buyer from delaying the delivery for more than five months. The farmer was allowed to sell to another buyer and no damages were owed to the original buyer.


The plaintiff was a grain dealer, and the defendant was a farmer. In early 2019, the grain dealer and the farmer entered into a written agreement for the farmer to sell non-GMO soybeans grown on 311 acres to the grain dealer for the 2019 crop year. Under the agreement, the farmer was responsible for costs of production and storing the beans until delivery. The agreement was “vague on pricing” and did not specify a delivery date. Instead, it stated that, “Seller will store crop until called by Buyer for delivery.”

The soybeans were priced on September 3, 2020. At trial, both parties testified that delivery usually occurs within a month after pricing. By December 2020, the farmer had requested that the grain dealer take delivery at least four times. Eventually, the grain buyer said it could accept delivery in January 2021.

After a late December snowstorm, the farmer checked on the soybeans, saw snow inside the bins, and was afraid the quality of the soybeans was deteriorating. Under the agreement, the grain buyer was allowed a discount if the soybeans did not meet a certain quality. Farmer sold the soybeans to a different party around December 30, 2020, and delivered no soybeans to the grain dealer. In response, the grain dealer demanded the farmer pay damages since the dealer was unable to meet its contract with another buyer. The farmer refused.

The grain dealer sued for breach of contract. The farmer answered by denying the existence of an enforceable contract and raising six affirmative defenses. After trial, the

district court ruled that there was no contract due to the vague pricing term and lack of delivery date. It further found that even if there was a contract, the farmer had proven all six affirmative defenses. The grain dealer appealed the district court’s determination.


The court of appeals found that there was a contract between the grain buyer and the farmer but found that the grain buyer repudiated the contract by refusing delivery. The court thus ruled that the farmer was free to sell his soybeans to another party in late December 2020.  

The court first determined that the vague pricing terms and undefined delivery date did not prevent the agreement from being an enforceable contract. Instead, evidence of “custom and practice” were enough to establish the meaning of the pricing and delivery terms. Further, both parties testified that it was customary for delivery to occur shortly after pricing. This established the subjective expectations of both parties. This shows there was the required “meeting of the minds” to form a contract. The court found that there was an implied delivery term that required the grain buyer to take delivery by December 31, 2020.

The court noted that if it did not rely on customary practice or subjective expectations, then the contract would be invalid “either for failure of consideration or unconscionability.” At trial, a representative of the grain buyer had testified that he believed the contract allowed the buyer to delay delivery until April 2022. The court rejected that interpretation. The court found that there cannot be an enforceable contract where one party could bear the costs of storing something indefinitely with no guarantee of payment by the other party.

Since there was a valid contract, the court reviewed whether the farmer breached the contract. To be successful in its breach claim, the grain buyer had to prove that it had performed “all the terms and conditions required under the contract[.]” The court found that the grain buyer failed to perform the contract and therefore repudiated the contract when it told the farmer it could not accept delivery until January 2021. Since the grain buyer could not successfully prove the farmer breached the contract, the court did not address the six affirmative defenses plead by the farmer.