2023 Illinois Compiled Statutes › Chapter 505 - AGRICULTURE › 505 ILCS 17/ - Agricultural Production Contract Code.

(505 ILCS 17/1)
Sec. 1. 
		Short title. 
		This Act may be cited as the Agricultural
Production
Contract Code.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/5)
Sec. 5. 
		Definitions. 
		As used in this Act, unless the context otherwise
requires:
"Capital investment" means a purchase or lease of any of the following:
(1) A structure used for producing or storing a     commodity required to be provided by the producer under the terms of the production contract if the structure has a useful life in excess of 3 years.  This includes, but is not limited to, swine farrowing buildings, grain storage facilities, and manure storage structures.
(2) Machinery or equipment used for producing a     commodity required to be provided by the producer under the terms of the production contract if the machinery has a useful life in excess of 3 years.  This includes, but is not limited to, trucks, tractors, combines, wagons, augers, and planters.
"Commodity" means livestock, raw milk, fruits, vegetables, or a crop.
"Contract input" means a commodity or an organic or synthetic substance or
compound that is used to produce a commodity, including but not limited to,
livestock,
plants, agricultural seeds, semen or eggs for breeding livestock, fertilizer,
pesticides, or
petroleum products.
"Contractor" means a person who offers, provides, or enters into a production
contract with a producer for the production of commodities in this State by the
producer.
"Crop" means a plant used for food, animal feed, fiber, oil, pharmaceuticals,
nutriceuticals, industrial uses, or seed, including but not limited to,
alfalfa, barley,
buckwheat, canola, corn, flax, forage, fruits, millet, oats, popcorn, rye,
sorghum,
soybeans, sunflowers, tobacco, vegetables, wheat, and grasses used for forage
or silage.
"Livestock" includes, but is not limited to, beef cattle, dairy cattle,
poultry, sheep,
or swine.
"Person" means an individual or entity, including but not limited to, a sole
proprietorship, a partnership, a corporation, a cooperative, an association, a
limited
liability company, an estate, or a trust.
"Produce" means to do any of the following:
(1) Provide feed or services relating to the care and     feeding of livestock. If the livestock is dairy cattle, then "produce" includes milking the dairy cattle and storing raw milk.
(2) Provide for planting, raising, harvesting,     identity preserving, or storing a crop.
"Produce" includes preparing the soil for planting and also for nurturing the
crop
by the application of fertilizers or soil conditioners, including those
substances regulated
under the Illinois Fertilizer Act of 1961, or pesticides as defined in the
Illinois
Pesticide Act.
"Producer" means a person who has been offered or who has entered into a
contract to produce a commodity.  "Producer" does not include a fertilizer or
pesticide
applicator, a feed supplier, or a veterinarian, when acting in that capacity.
"Production contract" means: (1) Any written document offered to or executed
by
a producer, under the provisions of which (i) the producer would sell to a
contractor, or
the contractor's designee, an identified commodity or commodities and (ii) the
contractor
has, or exercises some control or direction over, the production process; or
(2) any
written agreement offered to or executed by a producer under the provisions of
which the
producer would produce, care for, or raise a commodity or commodities not owned
by the
producer, using land, equipment, or facilities owned or leased by the producer,
in
exchange for payment.  For purposes of this definition, control or direction
over the
production process includes (i) the contractor's designation of special
commodity
characteristics, such as those present in value-enhanced grains, or specific
genetics in
livestock or (ii) the contractor's designation of a production input, such as a
seed variety,
to be used by the producer to fulfill the production contract.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/7)
Sec. 7. Applicability. This Code applies to production contracts signed on or after January 1, 2005.
(Source: P.A. 93-815, eff. 1-1-05.)
(505 ILCS 17/10)
Sec. 10. 
		Limited applicability. 
		This Act shall not apply to a production
contract under the provisions of which the commodity is to be delivered by the
producer
to the contractor or the contractor's designee within 30 days after the date of
the production
agreement.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/20)
Sec. 20. Readability of production contracts.
(a) A production contract must comply with all of the following:
(1)  It must be in a typeface at least as large as     10-point modern, one-point leaded.
(2) It must be divided and captioned by its various     sections, have an index of the major provisions of the production contract and the pages on which they are found, and use commonly-used and understood words and terms, but may include technical or industry terms customarily used and understood by producers in the ordinary course of business.
(3) It must limit references to other sections or     provisions and, when incorporating a document, have a copy of the document attached.
(4) It must have a Flesch-Kincaid Grade Level score     no higher than the twelfth grade. This provision does not apply to a document attached to the contract if the contractor, affiliate, or subsidiary is not the original publisher of the document.
(b) A contractor may include a provision in the index required by Section 25
that the production contract being offered meets the requirements of this
Section as to readability.
(Source: P.A. 93-522, eff. 1-1-05; 93-815, eff. 1-1-05.)
(505 ILCS 17/25)
Sec. 25. 
		Index. 
		An index of the major portions of the contract and the
pages
on which they are found must be included with each production contract offered
to a
producer that exceeds 2 pages in length.  The index must contain references for
any of the
following that are included in the contract:
(1) The names of the parties to the contract.
(2) The definition sections of the contract.
(3) The provisions governing cancellation, renewal,     or amendment of the contract by either party.
(4) The sections outlining the duties or obligations     of each party.
(5) The compensation information.
(6) Any provisions subject to change in the contract.
(7) Any special provisions relative to production     guidelines.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/30)
Sec. 30. 
		Confidentiality clauses. 
		A production contract may include a
confidentiality provision, but communications with any of  the following shall
not be
considered a breach of any such provision:  (i) a producer's spouse; (ii) a
producer's
parents, siblings, and children of the age of majority if these persons are
partners,
shareholders, officers, or directors of the producer's agricultural operations;
(iii)
accountants; (iv) attorneys; (v) bankers; (vi) financial institutions; (vii)
farm managers;
(viii) trusts or trust beneficiaries; or (ix) the partners, officers, or
directors of the
producer's agricultural operations.  When communicating with these persons, the
producer must request each person to treat the information as privileged and
confidential.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/35)
Sec. 35. 
		Special provisions. 
		If a production contract requires any
special
production or handling guidelines required by the producer, these provisions
must be
fully explained in the contract.  These provisions include, but are not limited
to, disease
protocols for livestock and segregation or identity preservation for grain.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/40)
Sec. 40. 
		Termination or alteration of contracts.
(a) A contractor may not provide, offer, or execute a production contract
that
allows the contractor to unilaterally terminate the contract unless (i) the
termination is the
result of a legitimate force majeure as applied to the contractor or (ii) the
producer breaches a material term of the contract or
voluntarily abandons the contractual relationship.
(b) A contractor may not alter the quality, quantity, or delivery times of
contract
inputs provided to the producer, unless agreed to by the producer.
(c) Any cancellation or termination provisions must include specific causes
for
the cancellation or termination and any circumstances under which the commodity
produced under the contract might be rejected in whole or part by the
contractor.
(d) Any circumstances in which the compensation to be paid by a producer
may
be discounted or increased shall include specific causes to be clearly and
concisely stated.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/45)
Sec. 45. 
		Investment requirements.
(a) This Section applies to all production contracts that have capital
investment
requirements.
(b) Except as provided in subsection (c), a contractor shall not take action
to
terminate or cancel a production contract until the contractor has done the
following:
(1) Provided the producer with written notice of the     intention to terminate or cancel at least 60 days before the effective date of the termination or cancellation.
(2) Reimbursed the contract producer for the value of     the remaining useful life of the capital investment items.  In calculating this reimbursement amount, the contractor may take into account the producer's ability to use the capital investments in other business enterprises of the producer and the opportunity to recoup the cost of the capital improvements by sale or lease.
(c) Exceptions.  A contractor may terminate or cancel a production contract
without remedy as required in subsection (b) if the basis for the termination
or
cancellation is any of the following:
(1) A voluntary abandonment of the contractual     relationship by the producer.  A complete failure of a producer's performance under a production contract shall be deemed to be abandonment.
(2) Failure of the producer to meet the specific     provisions of the contract and failure to remedy his or her default.
(3) The conviction of a producer of an offense of     fraud or theft committed against the contractor.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/50)
Sec. 50. Enforcement; offenses; remedies. The Attorney General is
primarily
responsible for enforcing this Act.
A violation of Section 20, 25, 30, or 35 is a business offense
under the Unified Code of Corrections punishable by a fine of not more than $10,000 per offense.
A producer may recover his or her actual damages for a contractor's violation
of
Section 40 or 45 of this Act.
(Source: P.A. 98-756, eff. 7-16-14.)
(505 ILCS 17/55)
Sec. 55. 
		Statute of limitations. 
		A claim that a production contract
violates this
Act must be filed within 4 years after the date on which the party alleging the
violation
knew or should have known of the existence of the violation.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/60)
Sec. 60. 
		Conflict with the Uniform Commercial Code. 
		To the extent that
any
provision of this Act conflicts with or is inconsistent with any provision of
the Uniform
Commercial Code, the provision of this Act shall control.
(Source: P.A. 93-522, eff. 1-1-05.)
(505 ILCS 17/90)
Sec. 90. 
		(Amendatory provisions; text omitted).
(Source: P.A. 93-522, eff. 1-1-05; text omitted.)
(505 ILCS 17/99)
Sec. 99. 
		Effective date. 
		This Act takes effect on January 1, 2005.
(Source: P.A. 93-522, eff. 1-1-05.)