Hubbard v. Utz Quality Foods, Inc.

Facts

P executed a written contract to supply D with a quantity of potatoes. The contract provided that the potatoes had to meet USDA standards for No. 1 white chipping potatoes. They had to have a minimum size and be free from bruising, rotting, and odors, which made them inappropriate for use in the processing of potato chips. The potatoes had to be the whitest or lightest possible color. 'Color' shall be at least # 1 or # 2 on the 1978 Snack Food Association 'Fry Color Chart.' P contends that the sample potatoes provided to D complied with all the quality requirements and, therefore, he complied with all terms of the contract. P sued for breach of contract and claims damages for the full contract price, $68,750. P contends that D was arbitrary in its refusal to accept his potatoes and that his potatoes substantially complied with the color requirement and that D's rejection was motivated by concerns about price, not by quality. D contends that the potatoes did not meet the quality requirements of the contract. D filed a counterclaim contending that P breached the contract by failing to provide the potatoes required by contract. The following facts were found by the court: Testing by Agtron instrument determined that the samples, for the most part, exceeded the No. 3 color designation on the Fry Color Chart. In September and October 1992, visual inspection of potatoes was the standard used in the industry. P understood that his crop would be judged by the visual observations of D's inspectors at the plant since that was the standard procedure that had been used prior to 1992 when P and his father had sent potatoes to D for processing. There is no compelling evidence that D purchased potatoes at lower market prices after it rejected P's crop. The market price during late 1992 and early 1993 was equal to or higher than P's contract price.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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