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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.
(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.)
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:
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Many states, including Iowa, criminalize the intentional killing, injuring, maiming, torturing or mutilating of dogs (just ask Michael Vick). However, Iowa, along with many other states, provides an exception to that rule, making it lawful for a person to kill a dog caught “worrying, chasing, maiming, or killing any domestic animal or fowl.” The rationale behind the law is to protect domesticated livestock, and it is a complete defense if a person shoots a dog while in the act of harming domesticated livestock.
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