## Facts

- Farmer Ray C. Clark entered a written forward contract in January 1995 to sell the Wallace County Cooperative Equity Exchange (Coop) 4,000 bushels of corn, with delivery due after harvest.
- The contract did not state that the corn had to be grown by Clark, grown on any specified acreage, or delivered from any identified bin or storage location.
- The contract included a quantity tolerance (allowing delivery of up to 10% less than the stated amount).
- In September 1995, a regional freeze severely damaged corn in the area.
- Clark harvested only 2,207.41 bushels of corn and delivered that amount to the Coop.
- Clark claimed the freeze excused him from delivering the remaining corn under the contract (beyond the permitted 10% tolerance).
- The Coop treated the contract as requiring delivery of the contract quantity (subject to the tolerance) regardless of Clark’s actual production and treated the shortfall as a breach.
- When Clark later sold grain to the Coop, the Coop withheld \$1,622.97 from what it otherwise owed him to account for the undelivered balance.
- Clark sued to recover the withheld \$1,622.97; the trial court ruled for the Coop, and Clark appealed.

## Issues

1. Did the freeze-caused crop damage excuse performance under K.S.A. 84-2-613 on the theory that the corn was “identified” to the contract and suffered casualty without fault?
2. Did the freeze and resulting short crop excuse performance under K.S.A. 84-2-615 as commercial impracticability because the event was a basic assumption of the contract?

## Decision

- The Kansas Court of Appeals affirmed the judgment for the Coop.
- K.S.A. 84-2-613 did not apply because the contract did not identify the corn to any particular source; it was a contract for a quantity of fungible goods, not for a specific crop from a specific place.
- K.S.A. 84-2-615 did not excuse Clark’s nonperformance because adverse weather and reduced yields are foreseeable risks in farming, and the contract did not shift that risk to the buyer.
- The Coop was permitted to treat the undelivered amount as a shortage under the contract and to offset \$1,622.97 from amounts otherwise payable to Clark.

## Legal Principles

- For K.S.A. 84-2-613, “identified” goods generally require the contract to tie performance to specific goods (such as a particular crop from designated land or grain stored in a specified bin). A forward contract for a stated quantity of corn, without a specific source, is not identified goods.
- When a seller promises a fixed quantity of fungible goods without limiting the source, the seller remains responsible to deliver that quantity even if the seller’s own production is reduced.
- Commercial impracticability under K.S.A. 84-2-615 requires an unforeseen contingency that was a basic assumption of the contract; ordinary weather-related shortfalls in agricultural production are commonly treated as foreseeable business risks.
- Absent contract language shifting production risk to the buyer, the farmer bears the risk of a short crop in a forward grain contract and may need to obtain substitute grain to meet the promised quantity.

## Conclusion

In *Clark v. Wallace County Cooperative Equity Exchange*, the court enforced a forward contract for 4,000 bushels of corn despite a freeze that reduced the farmer’s harvest, holding that the UCC’s casualty provision did not apply because the corn was not identified to the contract and that commercial impracticability was unavailable because weather-related crop loss is a foreseeable farming risk; as a result, the Coop could offset the shortage and Clark could not recover the withheld \$1,622.97.


Clark v. Wallace County Cooperative Equity Exchange, 986 P.2d 391 (1999)