Agricultural contracts can help to manage relationships and facilitate both farming operations and agricultural transactions. Understandably, when disputes arise regarding the terms or performance/non-performance of a contract, stress and potential financial losses can result.
Farmers in California typically enter into various contracts when operating their businesses, including:
- Sales contracts: Agreements for selling crops or livestock
- Lease agreements: Terms for renting land, equipment or facilities
- Service contracts: Arrangements with suppliers or service providers for inputs like seeds, fertilizers or machinery repairs
Additionally, California farmers may enter into contracts per the state’s Williamson Act Program when the land usage restrictions encouraged by this program make sense under the circumstances. Disputes can – and often do – arise regarding any of the agreements listed above.
The root causes and resolution of contract disputes
Disputes are commonly grounded in a clash of interests, expectations or circumstances of one or more parties to a contract. Common root causes of agricultural contract disputes include:
- Non-payment or late payment: Buyers failing to pay or delaying payments for crops, services, etc.
- Quality and quantity disagreements: Disputes over the quality or quantity of goods delivered versus what was agreed upon are also common
- Breach of terms: Either party failing to adhere to agreed terms, such as delivery schedules or maintenance responsibilities can be contentious matters
Thankfully, there are often ways to resolve contract disputes amicably. And when amicable approaches don’t work, mediation, arbitration and litigation may all be viable options when a situation is particularly consequential. As every contract dispute is unique, it is generally wise to avoid making assumptions about how to approach such circumstances. Instead, seeking personalized legal guidance – especially if much is at stake – is likely wise.