Baker v. Ratzlaff

Baker (plaintiff) is a purchaser and reseller of popcorn. Baker operates a plant in Stratford, Texas but processes payments and other business in Garden City, Kansas. Ratzlaff (defendant) is a grower of popcorn. In 1973, Baker contract to purchase popcorn from Ratzlaff at a price of $4.75 per hundredweight. Ratzlaff was to deliver the popcorn in three installments. Baker was to provide payment on delivery. The contract contained a termination clause providing that if Baker failed to provide payment to Ratzlaff, Ratzlaff was entitled to terminate the contract and keep or dispose of the remaining popcorn. Shortly after Baker and Ratzlaff entered the contract, the market price of popcorn rose to over $8.00 per hundredweight. In February 1974, Ratzlaff made two deliveries of popcorn to Baker’s Stratford, Texas plant. Ratzlaff did not request payment at the time of either delivery and Baker’s foreman, Martin, did not offer payment. Martin did, however, draft weight slips for each delivery. Baker’s standard practice was to issue weight slips at the time of deliveries and to send copies of the weight slips to its Garden City office. The Garden City office then processed payments for the deliveries based on the weight slips. Ratzlaff later spoke with Baker on the phone about the timing of a future delivery, but neither party brought up the issue of payment. Shortly after this conversation, Ratzlaff sent Baker a notice that it was terminating the contract due to lack of payment on delivery. After receiving the notice of termination, Baker promptly sent two payments for the two deliveries to Ratzlaff. Ratzlaff had already secured another contract with a third party, however, to provide popcorn at a price of $8.00 per hundredweight. Baker was forced to obtain alternate popcorn at a price of $10.30 per hundredweight. Baker brought suit in Kansas state court against Ratzlaff. The trial court awarded Baker $52,000 in damages, and both parties appealed.