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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.
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.
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.
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.
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.
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.
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.
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, 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.
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.
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.
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.
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.
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.
A right of first refusal is triggered upon the happening of certain events. One of those triggering events could be the owner’s decision to sell the property. In that event, the right is conditional until the party holding the right is notified of a third party offer to purchase the land. Once this occurs, the right is no longer conditional and becomes an option to purchase the property, which requires strict compliance with the terms of acceptance.
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.
Federal law prohibits individuals from possessing firearms if a criminal no-contact order is in place against that individual in cases where the protected party fits the description of an “intimate partner.” So, can a person subject to a criminal no-contact order lawfully possess a firearm for the purpose of hunting alone?
Several cases of securities fraud have recently been discovered in Iowa. In this case, the defendant appealed his multiple convictions for ongoing criminal conduct, first-degree theft, securities fraud, transacting business as an unregistered broker/dealer, and sale of unregistered securities. The defendant argued that the trial court judge erred in several ways, namely by failing to instruct the jury on the identity of the victims of some of the theft charges and improperly defining the elements of securities fraud in Iowa.
The Iowa Attorney General’s Office has sued a convenience store operator in northeast Iowa, for fraudulently selling E85 fuel as regular unleaded and E10. The suit has been filed in Blackhawk County District Court and names Jerry Fratzke as the defendant. Fratzke, of Jesup, Iowa, owns Pronto markets in Sumner, Fairbank and other locations. The Attorney General sued after an investigation by the state Weights and Measures Bureau of the Iowa Department of Agriculture and Land Stewardship revealed that the Fairbank and Sumner Pronto Market stations were receiving shipments of E85 fuel from
The defendant pled guilty to assault causing bodily injury and was sentenced to 60 days in jail, given probation, fined and ordered to pay $1266 in Medicaid expenditures triggered by the victim’s injuries. The defendant appealed the portion of the sentencing order requiring him to pay for the victim’s Medicaid expenses.
This case shows, once again, the importance of getting agreements with contractors in writing- especially if there is some question as to their financial well-being or trustworthiness. Here, a financially-stressed contractor failed to pay bills for materials and ended up being charged with theft as a habitual offender.
Iowa Code §481A.125 deals with the intentional interference with lawful hunting activities in Iowa and imposes misdemeanor penalties for violations. In this case, a landowner who had previously been charged for allegedly shooting a handgun at a group of hunters in 2000, found himself in a similar situation with the same group nearly six years later. In 2006, an eleven-member hunting party had permission to hunt on the land adjacent to the plaintiff. While the landowner was doing morning farm chores, he allegedly saw a hunter (his neighbor) climb the fence and enter onto his land.
The Heemstra/Lyon dispute has had many developments. Here, the Heemstra family appeals a trial court ruling that they transferred substantial real estate holdings to various family trusts and other entities in an effort to hinder and delay creditors. But, the appellate court affirmed the trial court’s award to the Lyon estate of approximately $200,000 in compensatory damages and punitive damages of nearly $750,000. The Heemstras’ argued, on appeal, that there was no conspiracy to defraud the Lyon Estate.
It is usually a good idea to reduce contractual matters and other arrangements to writing, even if family members are involved. The plaintiffs in this case are a married couple with a five year old child. The defendant is the uncle of the wife of the married couple. The defendant had a practice of allowing his grandchildren to use his horses as 4-H projects free of charge. In the summer of 1999, the plaintiffs visited the defendant’s farm and the child rode one of the defendant’s horses. The horse was gentle and had been used in 4-H projects in the past.
One fundamental principle of the law governing surface water is that it is wrongful for a landowner to disturb the existing pattern of drainage and, as a result, obstruct the flow of water from someone else’s property, or cast upon someone else’s property more water than would naturally flow on it, or cause an unusually high concentration of water in the course of drainage. That’s a big issue for rural landowners owning land next to a tract that is being developed or, as in this case, owning land near a highway construction project.
Sometimes landowners, especially in small towns, tend to ignore city ordinances when building and/or placing structures either on their property or adjacent to it. Often, public officials in these small communities either tend to not enforce existing ordinances or enforce them inconsistently. But, if a city chooses to enforce a restriction against obstructing a public right-of-way, must the city show that the obstruction interferes with travel or causes some sort of damage? That was the issue in this case.
This case involves both contract and tort claims resulting from the plaintiff breaking a tooth upon biting into an olive with the pit inside. The plaintiff opened a jar of “minced pimento stuffed” olives and used some of the olives on a salad. Upon eating the salad, the plaintiff bit down onto an olive pit (or fragment) and fractured a tooth. The defendant imported the olives from Spain. They were shipped to the U.S. in 150-kilogram drums to Virginia, where the drums were emptied and the olives washed and put in glass jars for retail sale.
Over the years, the Iowa courts have dealt with many nuisance cases both in an agricultural and non-agricultural context. Two points are clear from the rulings – one landowner cannot unreasonably interfere with another landowners use and enjoyment of their property; and negligence is not the same thing as nuisance. On the latter point, it doesn’t matter if a landowner has obtained all of the necessary permits, is conducting their activity in accordance with best management practices and is incompliance with all applicable zoning rules - the activity can still be deemed to be a nuisance.
This case involves a wrongful death action against the Iowa Department of Transportation (DOT). The decedent was killed by a train at a railroad crossing. Prior to the accident, the DOT had removed rumble strips and replaced them with a flashing light placed on top of a stop sign that was at an intersection south of the railroad crossing. However, the light was not working on the night of the accident.
Bailment situations arise frequently in agriculture. A bailment exists when personal property is delivered by one person (the bailor) to another person (the bailee) for a specific purpose that benefits either the bailor, the bailee, or both, with the understanding that the personal property will be returned at the end of the bailment. So, for example, when one farmer borrows another farmer’s tractor, that is a bailment, and a bailment relationship is created between the parties. What happens if the tractor is damaged or destroyed during the bailment?
Iowa Courts have recently decided two civil cases filed against Iowa towns involving the issue of the towns’ legal responsibility for injuries to individuals at a public building or at a public event, and a third case involving premises liability on private property.
The Iowa Court of Appeals has decided two cases involving employer liability – one case involving the issue of an employer’s liability to an employee for an on-the-job injury, and a second case involving the question of when an employer is liable for injuries to a patron that an employee causes.
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.