LEGAL PHASES OF COOPERATIVE ASSOCIATIONS 51 
have been obtained. The power of deciding when the conditions in 
question exist is usually left with the board of directors or a special 
committee appointed for the purpose. Such a provision is valid, 
and the decision made with respect to it is binding unless fraud or 
bad faith is established by the persons challenging the correctness 
of the decision, s 4 If the data submitted to the board of directors 
or the executive committee that was vested with authority to make 
the decision in question were false, and known to be false by those 
submitting them, then the decision based thereon may be upset even 
though the board or committee acted in good faith.ss 
If the contract specifies that a notice advising that the required 
"sign-up" has been effected will be mailed to each producer signing 
the contract and the notice is not mailed the contract is not effective so 
unless waived. si 
A contract could specify that public notice shall be given when 
the required "sign-up" is effected, and then notice could be given in 
the public press of the district. 
Ordinarily it would appear preferable to have the contract so 
drawn that it is effective and binding from the signing thereof but 
subject to cancellation in the event the required "sign-up" is not 
effected by a certain time. In this way questions regarding the status 
of the contract prior to the giving of the notice that the necessary 
"sign-up" has been obtained are eliminated. 
DURATION OF MARKETING CONTRACTS 
For what period of time may a cooperative marketing contract be 
entered into ? Many cooperative statutes 8S prescribe the maximum 
number of years, frequently 10, that may be covered in a contract, and 
if the statute under which an association is formed contains such a 
provision it should be observed. If there is no restrictive provision 
on the subject in the law of the State or the charter of the associa- 
tion, then an association and its members are free to enter into 
marketing contracts for any period that may be agreed upon. 
Provisions may be inserted in marketing contracts (unless the 
length of time that a contract may run is restricted by law or the 
charter of the association) providing that the contract shall continue 
unless canceled on or before a certain date. Such cancellation clauses 
are usually referred to as withdrawal provisions. 
A withdrawal provision affects only the length of time that the 
contract may run. It does not affect the binding character of the 
contract. Unless the conditions of a withdrawal provision are met. 
84 Lennox v. Texas Farm Bureau Cotton Ass'n (Tex. Civ. App.), 16 S. W. (2d) 413; 
Rowland v. Burley Tobacco Growers' Ass'n, 208 Ky. 300, 270 S. W. 784 ; Washington 
Wheat Growers' Ass'n v. Leifer, 132 Wash. 602, 232 P. 339 ; Pittman v. Tobacco Growers' 
Co-op. Ass'n, 187 N. C 340, 121 S. E. 634 ; Poultry Producers of Central California v. 
Nilsson, 197 Cal. 245, 239 P. 1086 ; Martinsburg & Potomac R. R. Co. v. March, 114 U. S. 
549 ; New England Trust Co. v. Abbott, 162 Mass. 148, 38 N. E. 432, 27 L. R. A. 271 ; 
Berger Manufacturing Co. v. l-Iuggins, 242 F. 853 ; Bower-Venus Grain Co. v. Norman 
Milling & Grain Co., 86 Okl. 152, 207 P. 297 ; Gratiot St. Warehouse Co. v. Wilkinson 
et al., 94 Mo. App. 528, 68 S. W. 581 ; Hayes Grain & Commission Co. v. Federal Grain 
Co., 169 Ark. 1072, 277 S. W. 521. The principle involved is applicable to any matter 
or thing. 
85 Northwest Hay Ass'n v. Chase, 136 Wash. 160, 239 P. 1 ; Wenatchee Dist. Co-op. 
Ass'n v. Mohler, 135 Wash. 169, 237 P. 300. 
86 Idaho Grimm Alfalfa Seed Growers' Ass'n v. Stroschein, 42 Idaho 12, 242 P. 444, 
47 A. L. R. 916. 
87 Wenatchee Dist. Co-op. Ass'n v. Thompson, et al., 143 Wash. 657, 255 P. 918. 
88 See sec. 17 of Bingham Cooperative Marketing Act of Kentucky on p. 123 of appendix. 
