Phillip Eugene Wendling, a Harvey County farmer and stockman, told Ted Puls, an active cattle buyer, in July of 1973 that he might have some cattle for sale around the middle of that August. Puls indeed asked Wendling to call him when he decided to sell his cattle. On the 13th of August, 1973, Wendling informed Puls that he had 103 head of cattle for sale. Puls in turn contacted George Watson, a veterinarian, for financial assistance on the purchase of the cattle. After an inspection of the cattle by Puls and Watson, the three individuals negotiated a price of 61 cents per pound for 98 head and 59 cents per pound for the other 5 head.
After officially weighing the cattle on August 16th, on Pul’s trucks (with 3% off for shrinkage), Pul gave Wendling a check for $1000. 00 as a down payment for the 103 cattle noted on the check. Wendling deposited the check on August 20th. On August 23rd Wendling penned the cattle in preparation for delivery, but neither Puls or Watson showed, sent trucks to pick up the cattle nor called. Wendling tried to call Puls, but was informed that Puls was “putting up hay”. Then Wendling called Watson, who said that he didn’t know why delivery hadn’t been taken and that he would talk with Puls.
Then on August 27, 1973, Wendling finally reached Puls by phone and demanded an explanation. Puls claimed that he had been trying to find a location to put the cattle. Wendling requested additional down payment and Puls refused. Puls then suggested that Wendling should maybe sell the cattle to someone else. Wendling stated that he needed a written release before he was free to negotiate another sale. Puls did not resond to the requirement. On August 28th, 1973, Wendling sought and was given the legal advice to acquire the written release from Puls and Watson before re-selling the cattle.
When Wendling attempted to locate Puls and Watson, he was only successful in finding Watson. Wendling requested that Puls and Watson meet up with him at his lawyer’s office to take care of the release form. Neither Watson or Puls showed up to the lawyer’s office and Wendling was left without resolution or an understanding of what Puls and Watson were intending to do from that point. Puls and Watson were sent a notice stipulating the details of the sale by Wendling on September 11th, 1973 which neither man responded to.
Wendling ended up selling the cattle in two separate lots on October 18th and November 1st of 1973. The trial court found that the statue of frauds was met in the case because the parties all admitted through court testimony that there was an agreement, including the terms and conditions. Although the court found that time was not of the essence in the contract sale between parties; the date of September 21st, which was when Wendling re-weighed the cattle and asked qualified livestock dealers to bid on the 103 head of cattle, is a proper date upon which to measure plaintiff’s damages for breach of contract.
The trial court stated that Wendling would be able to use the $1000. 00 down payment to go toward those damages. Facts of the case presented: Puls and later Watson, displayed an interest in purchasing Wendling’s 103 head of cattle. Puls wrote a check to Wendling for $1000. 00 which noted 103 head of cattle. After a $1000. 00 down payment, Puls and Watson did not pick up the 103 head of cattle. Puls could not be found for a significant time and Watson, stating that he did not know why delivery hadn’t been taken and that he would talk with Puls.
Puls and later Watson denied requests from Wendling for a written release form so that he could resell the cattle, once in person with Puls and later neither showed up to Wendling’s lawyer’s office to fill the form out. All parties admit they entered into a contract for the sale of goods. They also agreed on the quantity of goods to be sold and the pricing of the goods. Since the parties admitted to these things, K. S. A. 84-2-201 did not prevent the contract from being enforced. Wendling sent notice to the two defendants stating the stipulations of the contract, neither responded.
The requirements of K. S. A. 84-201(3)(b) were deemed as met by the trial court. Issue(s) brought to court: Appellants sought response to: Was it acceptable for the plaintiff to set a date of September 21st, 1973 for the defendants to complete the contract? The defendants looked to K. S. A. 84-2-708. Was it acceptable that the plaintiff uses the down payment for damages? The appellants looked to K. S. A. 84-2-718. The appellants attempted to state that the contract sale date should be August 23rd not September 21st and that there should be a subtraction of $500 dollars from the $1000. 0. Answer/Holding: Issue 1: The trial court deemed that “in electing to forestall the declaration of a breach of contract in an attempt to secure the performance of the defendants thereto, was reasonable and it was proper under the circumstances for plaintiff to set a reasonable time in which defendants were required to complete the contract”. Wendling, the plaintiff set the date of September 21st, 1973, which the court found reasonable since within the letter sent September 11th gave the defendants 10 days to act.
Issue 2: Using K. S. A. 84-2-708, the damages were calculated for the plaintiff. The court found that the computed price (per weight of cattle) on September 21st and the fair market value of the cattle on that particular date, and incidental damages related to freight cost would not include the down payment of $1000. 00. The court saw that the date of September 21st should stand since the seller has remedy in this circumstance under K. S. A. 84-2-708(b) which states that the entire down payment must be applied.
Reasoning and Disposition: The The Appeals Court surmised that the case must stand due to the provisions and precedence of the Kansas UCC and similar cases. Several items, language, and terms were scrutinized by the court but in key was that all parties clearly and openly admitted the existence of the contract including quantity, price and date of delivery. The seller provided the buyers a written notice stating terms and conditions of the contract, which in turn the buyers neither responded nor denied.
The court found that the requirements of K. S. A. 84-2-201(3)(b) were indeed met. Opinion of the case: I feel that there could be no reversal of the court’s decision. The initial judgment was just and the appellants had no legal standing. Since Ted Puls had experience with being a cattle dealer, he should have known a fair amount of what he was getting into. I will say that Mr. Watson may have gotten into a situation that he was not ready for as potentially a silent partner. Although in the beginning of the case Mr. Wendling seemed to be a farmer who came into some cattle to sell, he certainly showed that he had enough experience in business (of some kind) to proceed the best he could to the requirements of the UCC. He was smart to go to his lawyer, but perhaps he was even smarter to know that he needed to try to get a written release from the buyers. Advice to defendant’s contract manager following this case: Advice to the parties of the case: Mr. Wendling: I would highly suggest that in the future Mr. Wendling continue to follow what he has learned.
It has paid off this time and should pay off again if he sticks by it. I would think that in his next attempt to sell anything, he come up with a simplistic contract that will include a set sell by/pick up date. This will aid his future buyers with understanding what they are being held accountable for. Mr. Puls: First, if you are interested in buying cattle, make sure you already have the proper space to house them. I would think that this goes without saying, but this was in fact what he told Wendling was holding him up from picking up the heads of cattle.
Also, learn from this situation and apply it to future transactions. He is apparently an active dealer in livestock, he needs to know that if he makes an agreement with a buyer or seller then he may be held accountable for what he states he can perform or provide. Mr. Watson: If you are going to get your feet wet in the business of livestock, perhaps it should be with an individual that is seasoned and reputable. Although he was only a silent partner, he is still related to the contract. Watson could have at least covered himself if he spoke with a legal representative on his own.
Influence on procurement managers: I would think that procurement managers would take away a good amount of information and experience at someone else’s expense. Always make sure that you enter into an agreement with a clear understanding of what the UCC states (and what the state you’re buying in says within its version). Make sure of what your limits are for what you’re looking to procure. Attempt to find out what the experience level is of the parties involved in any transaction. This is certainly not possible in most cases, but worth avoiding a headache when it is possible.