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Contracts Keyed to Summers
Crowell v. Campbell Soup Company
Citation:
264 F.3d 756Facts
In 1987, Crowell and other farmers in Minnesota and Iowa (plaintiffs) entered into a series of chicken production contracts with Herider Farms, Inc. (“Herider”) (defendant), a subsidiary of the Campbell Soup Company. The farmers were to construct, equip and operate barns in exchange for Herider’s promise to regularly place flocks of newborn chickens with the farmers. The average barn cost $250,000 to construct and had a 40,000 chick capacity. The contract provided that if Herider terminated the contract before 35 to 40 flocks had been placed, then the farmers would still receive compensation for the cost of construction of the barn. In 1997, Herider sent a letter to each of the farmers informing that that it was shutting down its processing plant and would cease placing flocks of chickens with the farmers. The farmers sued Herider, claiming that Herider had terminated their contracts without cause. The farmers alleged that Herider made several pre-contract oral promises that it would only terminate their contracts for cause. The trial court prohibited parol evidence of the pre-contract oral promises on the ground that the contracts were not ambiguous as to Herider’s right to terminate the contracts without cause.
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