In July of 1973, Phillip Eugene Wendling, a Harvey County farmer and stockman, mentioned to Ted Puls, an active cattle buyer, that he might have some cattle available for sale in mid-August. Puls requested Wendling to inform him when he decided to sell his cattle. On August 13, 1973, Wendling notified Puls that he had a total of 103 cattle ready for sale. Puls then reached out to George Watson, a veterinarian, seeking financial assistance for the purchase of the cattle. After Puls and Watson inspected the cattle, the three individuals negotiated a price of 61 cents per pound for 98 head and 59 cents per pound for the remaining 5 head.
After weighing the cattle on August 16th, Pul issued a check to Wendling worth $1000.00 as a down payment for the 103 cattle mentioned on the check. Wendling deposited said check on August 20th. On August 23rd, Wendling prepared the cattle for delivery, but Puls and Watson did not arrive with trucks or provide any explanation. Wendling attempted to contact Puls, but was informed that Puls was busy “putting up hay”. Wendling then contacted Watson, who claimed to be unaware of the reason for the delay and promised to discuss the matter with Puls.
On August 27, 1973, Wendling finally called Puls and demanded an explanation for the situation. Puls claimed he had been searching for a place to keep the cattle. Wendling asked for more money upfront, but Puls refused. Instead, Puls suggested that Wendling should try selling the cattle to someone else. However, Wendling insisted on receiving a written release before he could proceed with another sale. Puls ignored this request. On August 28th, 1973, Wendling sought legal advice and was advised to obtain a written release from Puls and Watson before reselling the cattle.
Despite Wendling’s efforts to locate Puls and Watson, he was only able to find Watson. He asked both Puls and Watson to meet him at his lawyer’s office in order to handle the release form. However, neither of them showed up, leaving Wendling with no resolution or understanding of their intentions. On September 11th, 1973, Wendling sent a notice to Puls and Watson informing them about the sale details but did not receive any response from either party.
Wendling sold the cattle in two batches on October 18th and November 1st, 1973. According to the trial court, both parties acknowledged the agreement and its terms during their testimonies. Although time was not considered crucial in the contract sale, September 21st was selected as the date to calculate damages caused by breach of contract. This decision was based on Wendling’s re-weighing of the cattle and inviting qualified livestock dealers to bid on the 103 head of cattle.
The trial court ruled that Wendling could use the $1000.00 down payment to cover the damages. The case involved Puls and later Watson expressing interest in purchasing Wendling’s 103 head of cattle. Puls issued a check to Wendling for $1000.00, specifying the purchase of 103 head of cattle. Despite making the down payment, Puls and Watson failed to collect the 103 head of cattle. Puls was unavailable for a considerable period, while Watson claimed ignorance regarding the delivery and expressed intention to discuss the matter with Puls.
Puls and Watson both declined Wendling’s request for a written release form, which would have allowed him to resell the cattle. Wendling had met with Puls in person initially, but later neither Puls nor Watson showed up at Wendling’s lawyer’s office to complete the form. Despite this, all parties acknowledge that they had entered into a contract for the sale of goods. They had also agreed upon the quantity and pricing of the goods. Because these facts were admitted by the parties involved, K. S. A. 84-2-201 did not hinder the enforcement of the contract. Wendling notified both defendants about the terms of the contract, but neither of them responded.
The trial court determined that the requirements of K. S. A. 84-201(3)(b) were satisfied regarding the issue of whether it was acceptable for the plaintiff to designate September 21st, 1973 as the fulfillment date for the defendants under the contract. The defendants invoked K. S. A. 84-2-708 in their argument and questioned the plaintiff’s utilization of the down payment as damages, while also seeking guidance from K.S.A 84-2-718.
The appellants contended that August 23rd should be recognized as the contract sale date instead of September 21st and asserted a deduction of $500 from the total amount of $1000.
The court concluded that it was reasonable for the plaintiff to postpone declaring a breach of contract in order to encourage compliance by the defendants, and therefore appropriate for them to establish a reasonable timeframe within which completion must occur.
In accordance with this reasoning, Wendling, acting as the plaintiff, designated September 21st, 1973 as this deadline, which was regarded as reasonable by the court due to a letter sent on September 11th granting ten days for response by the defendants.
According to K. S. A. 84-2-708, the plaintiff’s damages were calculated for Issue 2. The court determined that the computed price (per weight of cattle) and fair market value of the cattle on September 21st, along with incidental damages for freight cost, would not include the $1000.00 down payment. The court decided that September 21st was the relevant date because the seller has a remedy under K. S. A. 84-2-708(b) which requires the entire down payment to be applied in this situation.
The Appeals Court determined that, based on the Kansas UCC guidelines and prior cases, the case was eligible to move forward. The court extensively analyzed multiple elements, including language and terms within the case. However, it was essential for all involved parties to acknowledge the contract’s existence, which included details such as quantity, price, and delivery date. The seller provided written notice to inform the buyers about the contract’s terms and conditions; nevertheless, there was no response or rejection from the buyers.
The court’s decision should not be reversed as the requirements of K. S. A. 84-2-201(3)(b) were met, and it was determined that the initial judgment was fair and the appellants lacked legal standing.
Ted Puls’ previous experience as a cattle dealer suggests that he should have been aware of potential risks involved, while Mr. Watson may have underestimated the challenges of being a silent partner in this case.
Despite initially seeming unfamiliar with cattle trading, Mr. Wendling showed enough business acumen to effectively handle the UCC requirements. Consulting his lawyer was a wise move, and seeking a written release from the buyers could be seen as even wiser.
Following this case, it is recommended for the defendant’s contract manager to continue following the lessons learned from this experience.
It has proven beneficial this time and should prove beneficial again if he remains committed to it. I believe that for his next sales attempt, he should create a straightforward contract that includes a designated sell by/pick up date. This will assist his prospective buyers in comprehending their responsibilities. Mr. Puls: Firstly, if you are considering purchasing cattle, ensure that you have suitable housing available for them. I would assume that this is self-evident, but in reality, this was the reason he informed Wendling was hindering him from collecting the cattle.
It is essential to learn from this situation and apply it to future transactions. The individual mentioned seems to be involved in the livestock trade. It is vital for him to comprehend that any agreement he makes with a buyer or seller can hold him accountable for his commitments and abilities. To address Mr. Watson directly, it is recommended that if he wants to venture into the livestock industry, he should consider partnering with an experienced and reputable individual. Even if he was a silent partner, he remains bound by the contract. To safeguard himself, Watson could have sought guidance from a legal representative.
Procurement managers can gain valuable knowledge and experience by learning from others’ mistakes. It is crucial for them to have a clear understanding of both the Uniform Commercial Code (UCC) and the specific regulations of the state where the purchase is taking place. They should also be mindful of any limitations related to their desired procurement. If feasible, gathering information about the experience level of all parties involved in the transaction can aid in avoiding potential issues.
