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HobbyFmr
Member

Can't deliver corn

Our local grain dealer will not accept any of the 60,000 bushels we have contracted for July due to lack of storage space. The contracts state "The Buyer shall have the right to postpone acceptance of this grain, for a period not exceeding thirty (30) days due to causes beyond Buyer's control and not occasioned by Buyer's fault or negligence. There are 2 dates on the contract: beginning delivery and ending delivery (07/01 & 07/31). So 30 days means 30 days from when?

After visiting with manager, I'm not optimistic they can take any or all of it by the end of July. Reading between the lines, I've concluded they didn't get nearly enough sold and shipped out before now. All of the corn is sold for above today's market price. What are our options come July 31st? 

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10 Replies
Veteran Contributor

Re: Can't deliver corn

Considering that you are dealing with $200K+, and not havining storage in july is not really a reason, beyond their control, I'd have a $200 chat with my attourney. Think about what they would do if you had sold them corn in excess of what you had.

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Senior Contributor

Re: Can't deliver corn

I am not a lawyer but I would guess the thirty days starts at the end of the delivery period, so I would guess you have to have that corn available to deliver at least to the end of August.  Don't know when your harvest starts but if you like the price and don't need bins it  would be worth waiting.

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Advisor

Re: Can't deliver corn

do you want to continue doing business with this company after this particular transaction? I would hate to sic an attorney on them without having a very frank discussion about their and your options and intentions. Most businesses want to keep a good reputation with their customers. I've never had to use an attorney(yet) to force someone to do anything. good luck.

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Advisor

Re: Can't deliver corn

Your options are you have agreed to allow them to postpone accepting delivery for 30 days.    So if the original agreement was July 1 to July 31 they are still in compliance if they take delivery before the end of August.  Don't like the terms?  Then you should not have agreed to it.

 

This is no different than when I went to my elevator this Spring and told them I would not be able to deliver my corn on time because the road had been posted and unlike past years our new road commissioner wold not allow me to sneak by on cold mornings.  They chose to honor the agreement with no penalty because they understood the situation.

 

You have a choice, you can conduct your business in an adversarial manner (Me vs. Them) or in a manner that is mutually beneficial.  It's kind of like back when I was working as a District Sales Manager for a little seed company.  The dealer contract was written by a lawyer and included references to the dealer manual and such.  A farmer asked what this all really meant?  I told him it meant if he worked with us and didn't try and screw us we were not going to try and screw him.  We wanted a long term relationship that was good for both of us or it wasn't good for any of us.  BUT if he tried screwing us we would hold to every little jot and tiddle in the contract and nobody would be happy.

 

How do you want to conduct business with this buyer is the heart of the matter.

 

If it is going to put you in a bind you need to be talking with them and see what kind of arrangements can be worked out.

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Contributor

ONly problem might be if corn is going out of condition.........

If any possibility that deferred delivery would result in corn going out of condition----------take plenty of samples now to show that corn was in condition during contract period.

 

I suspect that your concern is whether or not you have the right to sell the corn elsewhere at increased price---------and I would bet that legally you do not have that right, until the expiration of the final 30day period.

 

As one poster noted-----------if you don't need the bin space..........no big deal.  If, however, you need the space, or the money, then appears to me that the buyer ought to try to work with you, if they want continued relationship.

 

 

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Veteran Advisor

Re: ONly problem might be if corn is going out of condition.........

By all means, take a representative sample of the grain and have it documented....if you are worried about quality deteriorating,  pay to have an official grade....you may want to get your buyer involved in that sampling process...you want to operate on the "no surprises" theory going forward..

 

Most buyers are going to work with you if they cannot accept the grain per contract terms.....but it's also important to realize "you don't get if you don't ask".......if you are willing to carry it for nothing once the 30 days past last contract date expires, they likely won't volunteer to write a check...

 

But don't expect the moon either.....you should not have to suffer further quality losses, but you shouldn't expect to get paid for the use of a bin you have no use for until harvest either....so we're really talking about the time value of money on $4 corn.....

 

You've been given good counsel by others......it's not about flame throwing and burning bridges---it's about solving a mutual problem to the satisfactory benefit of both parties..

 

Good luck and keep us informed

 

Ray J

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Frequent Contributor

Re: ONly problem might be if corn is going out of condition.........

Its not relevant if the corn is in condition now or not.  What matters is the condition it is in when he delivers it. 

 

 

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Frequent Contributor

Re: Can't deliver corn

My first reaction after reading this thread is not the arguement about delivery dates/ quality issues.  I would be more than concerned about the financial well being of this grain dealer.  Your discussion about not him getting enough sold, etc would make me nervous as to the business management of the dealer (have they screwed up somewhere) and/or are they getting stiffed by somebody. 

 

Even though you may have some higher priced contracts you want to collect on, it may be wise to still have physical control of the grain just in case he has financial problems.  At least you can deliver somewhere else and get paid.

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Advisor

Re: Can't deliver corn

"Even though you may have some higher priced contracts you want to collect on, it may be wise to still have physical control of the grain just in case he has financial problems.  At least you can deliver somewhere else and get paid."

 

Not necessarily. If the 30 days have expired, maybe.  But I think you will find in bankruptcy procedings if you are contracted to deliver it that contract is valid and will be enforced by the courts even if they don't have the money to pay you. Federal Marshalls aren't paid to be fair, just do what the court says.

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