Rush Johnson Farms Inc. Case Study

Rush Johnson Farms Inc. v Missouri Farms Association, 555 S.W.2d 61

Procedural History

Farmer has suet pending against Missouri Circuit Court of Chariton County Association for a unproven balance. The Missouri Circuit Court (MCC) stated that the farmer failed to furnish the full amount of goods agreed upon. The farmer insisted that the said contract was oral and should not be admitted. The MCC deems that the farmer should be considered a “merchant” under terms of Mo. Rev. Stat. § 400.2-201.

Facts

In 1977 Rush Johnson Farms, Inc. sued the Missouri Farmers Association, Inc. (MFA) for soybeans sold to MFA and a balance left unpaid by MFA in the amount $4,094.60. MFA contended that Rush Farms entered into a verbal contract with them to supply MFA with a total of 6,000 bushels of beans but the total amount was not delivered as promised. MFA also contends that the $4,094.60 was for recoupment of the none payment of bushels by Rush Farms. Rush Farms states that there was not a legal contract entered into by either party because it was an oral contract. MFA counter sued that that Rush Farms was considered a “merchant” and an oral contract can be used.

Issues

Can Mr. Johnson of Rush Farms, Inc. be considered a “merchant”?

Is an oral agreement considered to be a binding contract for the said 6000 bushels at a price of $4.02?

Answer/Holding

Mr. Johnson being a farmer and owning two farms in Missouri counties and selling soybeans to numerous elevators throughout the years is considered to be a “merchant” under terms of the UCC. Being seen as a merchant by the courts the oral agreement between Rush Farmers and the MFA is considered to be legal. Due to the knowledge that Mr. Johnson has dealing with selling soybeans he understood the steps it took to receive the best price for his sales thereby getting with the secretary of the MFA to ask her to notify him when the price of beans had reached $4.02 per bushel. He verbally agreed with the secretary to sale...