Maple Farms signed a contract with the “City School District of the City of Elmira” to supply milk at a fixed cost. They settled to supply the milk to “City School District of the City of Elmira” (defendant) for the year 1973 to 1974. This was in accordance to the agreement on15th June 1973 at a fixed price of 0759 dollars for every half pint. During that time the mandated cost of raw milk was 8.03 dollars per cwt where the United States Department of Agriculture was in control of the milk at the farm. The change in the market was not contemplated by the plaintiff as they had committed to a Fixed Price Contract with the defendant (Miller 19).
The farm was aware that the milk price was liable to change, but there was not any clause included to excuse it. Marple Farm was, therefore, found in a hard situation when the milk prices inflated. In the year 1973 there was a tremendous increase in the milk price of 9.5% from the date the contract was signed. The plaintiff, therefore, requested the defendant to relieve them of the contract as they were incurring huge losses but the defendant refused. The farm stated in details that they would incur a loss of $7,350.55 if they continued supplying the same amount of raw milk (Miller 64).
Marple farm was sued for Declaratory Judgment that performance was not practical with the agreed price but the court still held them responsible for the sale of the milk to the school. The plaintiff claims further that The Federally Sponsored Milk Lunch, would further decrease the price of the milk hence increasing the losses. The defendant was still not willing to cancel the contract even after the request (Miller 14).
The legal basis of the plaintiff to be relieved of the contract is in the doctrine of the Uniform Commercial Code.