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In the case of Campbell v Wentz, how could Campbell's change its contract in the future...

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awlgeelady | Student, Undergraduate | Honors

Posted May 22, 2013 at 1:11 PM via web

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In the case of Campbell v Wentz, how could Campbell's change its contract in the future so as to avoid the unconscionability problem?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted May 22, 2013 at 2:14 PM (Answer #1)

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It is a little bit hard to know what sort of clauses would have satisfied the judge in this case since, as we can see in the columbia.edu link below, it is not really clear that the clause was unconscionable.  I think that there are two things that Campbell’s might have been able to do.

It appears that the clauses that offended the judge so much were the clauses that said that A) growers had to get written permission from Campbell’s to sell their produce if Campbell’s could not take it when they (the growers) were ready to deliver and B) that the growers could not sell their produce to anyone else if they were unable to deliver it to Campbell’s.   For the first of these clauses, Campbell’s could probably have negotiated a time limit on their exclusive option.  They could have said that, after X number of days, the farmers could sell elsewhere.  That would have protected the farmers’ ability to sell before their product spoiled.  For the second clause, Campbell’s might have inserted some sort of test of the validity of the farmers’ reason for being unable to deliver the produce.  If the farmers had some objectively unavoidable reason that they could not get the product to Campbell’s (again, perhaps within a certain time period), they would be allowed to sell.  However, if they were making up a reason so as to be able to sell for a higher price, the test would be used to reject their claim.

Sources:

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rienzi | Valedictorian

Posted May 23, 2013 at 1:59 AM (Answer #2)

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The problem that the Court had with Campbell's contract was that one clause said that it could retain control of the carrots even though it was not prepared to accept delivery and pay for them. But, under those circumstances Campbell did not have contractual provisions to address these "orphaned" carrots. Campbell felt they could leave that as a problem for the grower. Essentially Campbell was able to control a farmer's carrots (and ultimately the carrot market) without actually paying for them. 

There were a number of ways for Campbell to fix the problem. The one they ultimately chose was to simply remove the offending clause from the contract. They also could have just paid for the carrots anyway. In between these two extremes, Campbell could have provided consideration (payment) for its right to keep control of the carrots. It also could have paid to store or otherwise preserve the carrots in light of their perish-ability until a final decision was reached, i.e., pay for them or reject them and allow them to be sold to someone else. Because the Court found the offending clause severable, Campbell should have provided more detail for the circumstance where Campbell's was not prepared to accept the carrots but wanted to keep control of them.

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