## Facts

- Pieper, Inc., a hog producer, entered a Weaned Pig Purchase Agreement with Land O’Lakes Farmland Feed, LLC (LOLFF), under which LOLFF agreed to buy weaned piglets from Pieper.
- LOLFF planned to resell the piglets to third-party “finishers,” who would raise them to market weight.
- The commercial arrangement depended on Farmland Industries, Inc. purchasing the market hogs from the finishers under a separate marketing agreement associated with Pieper.
- The Agreement expressly conditioned LOLFF’s obligation to purchase piglets on the finishers’ ability to market the resulting hogs through a specified Farmland marketing agreement; the Agreement stated LOLFF would purchase piglets “only while” its customers had that ability.
- Pieper’s president testified that the arrangement depended on Farmland taking the hogs and that the hogs “had to go” to Farmland for the deal to work.
- Farmland refused to purchase the market hogs from the finishers and declined to consent to an assignment of the Pieper–Farmland contract.
- LOLFF terminated the Agreement, asserting that Farmland’s refusal frustrated the Agreement’s purpose.
- Pieper sued for breach of contract; the district court granted summary judgment to LOLFF on the affirmative defense of frustration of purpose.

## Issues

1. Whether, under Iowa law, Farmland’s refusal to buy the finished hogs substantially frustrated the Agreement’s principal purpose so as to discharge LOLFF’s duty to purchase weaned pigs.
2. Whether the record presented any genuine dispute of material fact that would preclude summary judgment on the frustration-of-purpose defense.

## Decision

- The Eighth Circuit affirmed the grant of summary judgment to LOLFF.
- The court held the Agreement’s principal purpose was a Farmland-centered supply chain culminating in Farmland’s purchase of the market hogs.
- Farmland’s refusal to buy from the finishers (and refusal to allow assignment) eliminated the ability to market hogs under the specified Farmland agreement, triggering the Agreement’s “only while” condition.
- The court concluded the continued participation of Farmland was a basic assumption of the Agreement and LOLFF did not assume the risk that Farmland would withdraw.
- Because the undisputed contract language and Pieper’s admissions established substantial frustration and lack of risk assumption by LOLFF, summary judgment was proper.

## Legal Principles

- Under Iowa law, frustration of purpose discharges a party’s remaining contractual duties when (1) the party’s principal purpose is substantially frustrated, (2) the frustrating event’s nonoccurrence was a basic assumption of the contract, and (3) the party seeking discharge did not assume the risk of the event.
- Contract text conditioning performance on a specified downstream marketing relationship is strong evidence of the contract’s principal purpose and the parties’ allocation of risk.
- Summary judgment is appropriate where the material facts relevant to frustration of purpose are undisputed and the moving party is entitled to judgment as a matter of law.

## Conclusion

The court held that the Agreement was conditioned on the continued ability to market finished hogs through Farmland, and Farmland’s refusal destroyed the transaction’s central objective; LOLFF’s obligation to buy weaned pigs was therefore discharged by frustration of purpose, warranting summary judgment.


Pieper, Inc. v. Land O’Lakes Farmland Feed, LLC, 390 F.3d 1062 (8th Cir. 2004)