9A BULLETIN 1106, U. S. DEPARTMENT OE AGRICULTTJRE. 
ground that they operate to restrain trade unlawfully. For a dis- 
cussion of this proposition the reader is referred to the sections 
dealing with liquidated damages and antitrust matters. 
POOLING: RIGHT TO DETERMINE GRADE. 
A provision in a crop contract authorizing a cooperative associa- 
tion to pool the products of the various members with whom it has 
contracts is undoubtedly valid. It is a proper subject for con- 
tract. Of course, the question of whether the pooling was done 
fairly and in accordance with the contract is a different matter. 
The association would be liable to a member in case it failed to act 
in good faith and in accordance with the terms of the contract. 
A stipulation in a contract giving a cooperative association or 
one or more of its officers or agents the right to determine conclu- 
sively the grade and quality of produce delivered under it appears 
to be valid. This doctrine is subject to the qualification that the 
officers or agents must act honestly and in good faith. In a case 
decided by the Supreme Court of the United States: 83 
A contract for the construction of a railroad provided that the company's engineer 
should in all cases determine questions relating to its execution, kinds of work to be 
done, and the compensation earned by the contractor at the rates specified ; that his esti- 
mate should be final and conclusive ; and that whenever the contract shall be completel v 
performed on the part of the contractor, and the said engineer shall certify the same 
in writing under his hand, together with his estimate aforesaid, the said company shall, 
within thirty days after the receipt of said certificate, pay to the said contractor, in 
current notes, the sum which according to this contract shall be due. 
It was held that in the absence of fraud or such gross mistake as 
would necessarily imply bad faith or a failure to exercise an honest 
judgment, the action of the engineer was conclusive and binding 
upon the parties. In a Massachusetts case 8i it was said : 
It is well settled that where one agrees that another may fix the price for 
certain property or the sum to be paid for material or services, the decision 
of the party selected can not be impeached by showing that he has committed 
an error of judgment or failed to avail himself of all the information which 
he might have obtained, or has valued the property too high or too low. 
These cases announce a principle which would clearly include the 
light of a cooperative association to determine in good faith the 
grade and quality or other factors incident to products delivered by 
d member if authorized to do so by a suitable provision in the 
contract. 
LIQUIDATED DAMAGES. 
Liquidated damages are damages the amount of which has been 
determined in advance by agreement between the parties. Long 
before the days of Blackstone parties inserted provisions in their 
a Tobacco Growers' Cooperative Association v. Jones, (1923) North Carolina ; 
Washington Cooperative' E. & P. A. v. Taylor, (Wash,) 210 Pac. 806. 
53 Martinsburg & Potomac R. R. Co. r. March, 114 U. S. 549. 
54 New England Trust Co. v. Abbott. 162 Mifss. 148, 38 N. B. 432, 27 L. R. A. 271 ; 
see also Berger Mfg. Co. v. Huggins, 242 Fed. 853. 
