Court Opinion

ID: 8935410
Source: CourtListenerOpinion
Date Created: 2022-11-27 07:29:18.964115+00
Date Added: 2024-06-11T17:09:37.106636
License: Public Domain

FAGG, Circuit Judge,
dissenting.
I respectfully dissent.
The contract at issue in this action is a simple, relatively standardized contract used by National with many commercial popcorn growers. Paragraph 6 of this contract expressly provides that “defects” in the popcorn will include “damage due to * * * weather.” Paragraph 7 of the contract provides further that National, “at its discretion, may * * * reject popcorn containing excessive portions of one or more * * * defects referred to in paragraph 6.” These provisions clearly place the risk of adverse weather on the grower of the popcorn, here Langemeier.
Whether the provision in paragraph 7 allowing National to reject popcorn with excessive weather damage is unconscionable under the circumstances of this case is a “[question] of law,” Melcher v. Boesch Motor Co., 188 Neb. 522, 198 N.W.2d 57, 61 (1972), focusing on the “circumstances existing at the time of the making of the contract,” id. (quoting Neb.U.C.C. § 2-302 comment 1); see also Neb.U.C.C. § 2-302(1); Geldermann & Co. v. Lane Processing, Inc., 527 F.2d 571, 575 (8th Cir.1975) (courts to look to “totality of circumstances surrounding the negotiation and execution of the contract”). Unanticipated events occurring after the creation of the contract are, as a result, irrelevant and cannot be considered. Further, in determining unconscionability, the court must bear in mind that the principle of unconscionability is intended to prevent “oppression and unfair surprise”; it is not intended to disturb the “allocation of risks” resulting from “superior bargaining power.” Melcher, 198 N.W.2d at 61 (quoting Neb.U.C.C. § 2-302 comment 1).
Applying these principles to the facts of this case, I conclude the provisions in question are not unconscionable. First while inexperienced as a popcorn grower, Lange-meier is by no means a newcomer to the business of agriculture. He has significant expertise in agricultural finance. Also, in addition to owning and managing over five thousand acres of row crops, Langemeier needs only to complete his thesis in order to receive his doctorate in agronomy. Further, prior to agreeing to the contract with National, Langemeier had a full opportunity to review the contract, including paragraphs 6 and 7, and understood that these paragraphs placed the risk of adverse weather on him. See Geldermann, 527 F.2d at 575. Finally, unlike Langemeier, the individual retained by him to farm the popcorn was quite experienced in the growing of popcorn.
Second, the evidence is clear that based on a fifty year weather average a planting date of May 25 (as required by the contract) should have permitted the crop to grow and mature fully prior to harvest. In fact, the district court specifically found that the growing season anticipated by the contract should have been long enough to allow the popcorn to mature and dry sufficiently. Only the intervening unanticipated weather occurring long after the contract was entered into gave rise to the issues now before the court.
Given this factual background, I believe the contract provisions at issue are enforceable. Langemeier has significant agricultural experience. There is no evidence of oppression or gross inequality of bargaining power between the parties to this commercial contract. See Melcher, 198 N.W.2d at 61; Geldermann, 527 F.2d at 575. Also, the provision struck by the *979court is commercially reasonable and in fact commercially necessary if National is to exercise effective quality control over the popcorn it purchases. Geldermann, 527 F.2d at 576. Finally, it is clear that absent unanticipated adverse weather, the contract provided ample time in which to grow and field dry the popcorn prior to harvest.
I conclude the district court misapplied the applicable law to the facts of this case. I would reverse the district court’s decision and enforce the contract as written.