National Farmers Organization v. Bartlett & Co., Grain

National Farmers Organization (NFO) (plaintiff) agreed to sell grain to Bartlett & Co., Grain (Bartlett) (defendant) in a series of forty-five contracts. Both parties fully performed under the first thirty-one of these contracts, leaving fourteen at issue. Over the next six contracts, NFO began not fully completing its grain deliveries on time. During this period, Bartlett began withholding some payment on grain that actually was delivered “as protection against realized or potential loss caused by failure on [NFO’s] part to perform all contracts not yet fully performed.” About a month later, with eight contracts still due to be performed, NFO informed Bartlett that it was ceasing delivery on the outstanding contracts until Bartlett made substantial payment for deliveries already made. Bartlett treated this communication as an anticipatory repudiation of the remaining eight contracts. Bartlett then paid NFO the amount owed on the previous six partial deliveries, setoff by damages due to NFO’s breach of those six contracts, as well as NFO’s anticipatory repudiation of the remaining eight contracts. NFO objected to the setoff with respect to the eight remaining contracts and brought suit. NFO claimed that its communications to Bartlett did not constitute anticipatory repudiation. The trial court found that NFO had repudiated the contracts and found in favor Bartlett. NFO appealed.