8 answers to the potato contract

Mario Versendaal, lawyer at Scholten Advocaten in Emmeloord, receives many questions this season from potato growers who have entered into a fixed price contract. About this language he will be in the studio at the end of August. In addition to general questions, which mainly concern the obligation to supply, many arable farmers have detailed questions about their situation. Some of these questions handled Versendaal for us.

Can I change things myself in a contract offered to me by a processor?
"Yes, that is possible, as long as the agreement has not yet been concluded. The processor makes a proposal and you may make a counter-proposal. The processor does not have to accept that proposal. You can use this negotiation phase to express your wishes and your interests as much as possible. possible. Once the agreement has been concluded, it is no longer possible to change things in the contract that is offered to you. After all, the conditions under which delivery will be made are then fixed. However, after conclusion of the contract, you can try to enter into consultation with the processor and discuss adjustments. This is no guarantee that the processor will agree to this."

I am selling my farm, can I transfer a multi-year contract?
"That depends. If you run your business in the form of a private company, you will sell the shares in it and transfer it to the buyer of your farm. The contracting party (the private company) then remains, from the position of the The other party is considered the same so that you do not have to transfer a multi-year contract. If you discontinue the business and another party wishes to take over your contract position, you will need permission from your other party. This may be arranged differently in the contract. For that reason it is wise to read the contract carefully."

What are the consequences if I refuse to deliver due to changed circumstances?
"If you refuse to fulfill the agreement, you commit a breach of contract. This is the incorrect or late fulfillment of obligations arising from an agreement, which is attributable to the debtor. The law also speaks of an 'attributable failure to comply'. '. The consequences of breach of contract are, in short, that you are generally liable for the damage that your contracting party suffers as a result. Your contracting party can claim the following from you: performance (with damages). This means that the agreement must be The damage suffered by the other party as a result of the breach of contract can be recovered from you."

"The contracting party can also claim alternative damages: instead of still fulfilling the agreement, the other party can claim damages from you. In concrete terms, this damage may consist, for example, of the additional price that must be paid when potatoes have to be purchased at a higher price from a other. You can also be fined, if this is contractually agreed."

What are the most important clauses I should include in a contract to protect my interests?
"Prior to concluding the contract, provisions can be included that protect your interests. The following points of attention are important in the potato contract: the quantity of potatoes, delivery time, price and payment term. These are often matters that you arrange in the general terms and conditions and you hand it over to the other party before the agreement is concluded. This unless the general terms and conditions of the other party apply to the agreement. A concrete example of what you can include in a contract is that the price to be paid by the buyer It will be higher if you have to irrigate extra (as a result of drought). So consider in advance what risks you run and then make arrangements for them."

If seed potatoes are not freely available, but only in combination with a contract, is this legally permitted or is this tying?
"In the Netherlands we have freedom of contract. This means that there must be an offer and acceptance with regard to what the parties have agreed. There is agreement between the parties when the explanation for both the offer and the acceptance arises from the freedom no one can be forced, not even a trading company. A processor may also impose conditions (insofar as these are not prohibited by law). The processor may make it a condition for the delivery of seed potatoes that you must conclude a delivery contract. This falls not under the heading of 'tying'."

As a potato grower, I can invoke force majeure, but I must always purchase additional potatoes to meet my obligations. Even when the situation is described as a disaster?
"This line of thought may be correct, depending on what is stated in the contract. In the event of a successful appeal to force majeure, the farmer cannot be obliged to purchase more, even if there is a natural disaster. In that case, there is a good chance that an appeal to force majeure will is successful. From a legal perspective, force majeure exists if a party cannot fulfill its obligations, while this cannot be attributed to him. It concerns an incident that occurs through no fault and/or risk of his own. Extreme weather conditions are an excellent example of this. "

In February 2018, I signed a contract for 12,5 hectares of Première (20 tons per hectare fixed price) and 5,5 hectares of Fontane (30 tons per hectare fixed price). After planting, I forwarded the hectares: 14,28 hectares of Première and 3,56 hectares of Fontane. When delivering, 250 tons were calculated at a fixed price. The Fontane's probably calculates 165 tons. Can I contact the processor for this?
"In fact, a contract was concluded here in February and you state that you reported adjustments in April. The question is whether, after the email of April 29, a confirmation from the field employee regarding the adjustments to the surfaces was received. As soon as this is not the case of, and this cannot be proven for you, it will be difficult. After all, you bear the burden of proof in that regard. If you fail to prove this, the 'earlier' contract, from February, will be assumed and you will be charged in accordance with the provisions in the February contract."

Is it legally permitted for seed potatoes to only be available from a chip factory or trading company? The freely available volume is very little.
"We must make a distinction between seed potatoes of free varieties and licensed varieties. The latter group is indeed often linked to a chip factory or trading house. They have exclusive rights with regard to (the purchase and sale of) these varieties. This means indeed that you can only buy them from them."