140 



Addressing Nonperformance 



So what if everything's been done right — a written contract has been signed by 

 the producer — and the producer still refuses to deliver the grain during the time 

 period specified in the contract? 



In this event, the seller has "repudiated " the contract. Under Section 2-610 of 

 the UCC, the buyer can suspend its own performance on the contract and either: 1) 

 await performance for a reasonable time; or 2) seek reimbursement — such as 

 "buying in" -- for breach of contract 



If the purchase contract is subject to the NGFA's Trade Rules, examine the 

 relevance of Grain Trade Rule 10 -- "Incomplete Shipment or Delivery" - which 

 states: 



Rule 10. Incomplete Shipment or Delivery. 



Seller's Conveyance: When the Seller finds that he will 

 not be able to complete a contract within the agreed limit, it 

 shall be his duty at once to advise the Buyer by telephone or 

 telegraph, whereupon it shall be the duty of the Buyer at 

 once to elect either to: (a) agree with the Seller upon an 

 extension of the contract; (b) after having given notice to the 

 Seller to complete the contract, the Buyer, by the exercise of 

 due diligence, will buy-in for the account of the Seller, the 

 defaulted portion of the contract; or (c) after having given 

 notice to the Seller to complete the contract, the Buyer will 

 cancel the defaulted portion of the contract at fair market 

 value based on the close of the market the next business day. 

 If the seller fails to notify the Buyer of his inability to com- 

 plete his contract, as above provided, the liability of the 

 Seller shall continue until the Buyer, by the exercise of due 

 diligence, can determine whether the Seller has defaulted. If 

 so, the Buyer shall immediately: (a) agree with the Seller 

 upon an extension of the contract to cover the deficit; (b) 

 after having given notice to the Seller to complete the 

 contract, the Buyer, by the exercise of due diligence, will 

 buy-in for the account of the Seller the defaulted portion of 

 the contract; or (c) after having given notice to the Seller to 

 complete the contract, the Buyer will cancel the defaulted 

 portion of the contract at fair market value based on the 

 close of the market the next business day.... 



The word "notice," as used in this rule shall mean 

 verbal communication when possible, and in all cases by 

 wire or other rapid written communcation. 



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