A Yuma County produce grower entered into a marketing and sales
agreement with a produce distributor. Under the contract, the distributor agreed
to front some of the growing costs and then sell the produce, taking a
commission on the sales. Under the terms of the contract, the distributor was
also permitted to recover some of his costs for selling the produce.
When the distributor tried to retain from the gross sales
proceeds over $200,000 in “quality control” costs, the grower sued the
distributor. I represented the grower in that litigation. The contract between
the grower and distributor put the burden of quality control on the grower and,
at the same time, listed 21 specific costs that the distributor could recover
out of the gross sales.
“Quality control” was not among the 21 costs listed, but
“repacking costs” were. Interestingly, during the litigation, when the
distributor turned over his accounting records, the repacking line-item showed
nearly $230,000 – a total that provided a thinly veiled cover for the $200,000
in unauthorized “quality control” costs for which the distributor sought
At trial, the distributor’s quality control contractor testified
that the produce coming to the distributor was of good quality. It is not clear
why someone was paid so much money to inspect produce that was of good quality.
In any event, our client was awarded over $200,000 for the “quality control”
costs that were wrongfully included in the repacking costs.
“Swearing Match” Avoided
When a list of items is set forth in a contract, the law
presumes that anything not specifically listed is excluded. In the absence of a
well-written contract, the decision-maker would have been left to the two
parties' competing testimonies as to whether “quality control” was properly
withheld as a cost. Attorneys often refer to this as a “swearing match,” because
both parties swear to tell the truth but testify in total opposition to one
The best way to avoid a swearing match is to put all material
terms in writing. In this case, the contract that was at the center of the
lawsuit had been prepared by veteran Yuma attorney Stephen Shadle, whose firm,
Shadle & White, has an of counsel relationship with Schneider & Onofry. That
contract proved to be crucial to our success in winning a recovery for our
If you need assistance with drafting a contract or have
litigation involving a commercial or agricultural agreement, Schneider & Onofry
has the resources and experience to assist you.