Shields Pork Plus, Inc. v. Swiss Valley Ag Service

767 N.E.2d 945 (2002)

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Shields Pork Plus, Inc. v. Swiss Valley Ag Service

Illinois Appellate Court
767 N.E.2d 945 (2002)

Facts

In February 1998, Pork Shield Plus, Inc. (Shields) (plaintiff) and Swiss Valley Ag Services (Swiss) (defendant) entered into a contract. Shields agreed to sell pigs to Swiss, which Swiss intended to sell to third parties. Among other criteria, such as a weight-range, the contract provided that the pigs must be 100 percent from the Newsham genetic line. The contract provided for monthly shipments of approximately 600 pigs for a 36-month period. Swiss accepted the initial shipment of pigs. However, in April 1998, Swiss only accepted 380 of 680 pigs because its third-party buyer did not need the rest of the shipment. There were no problems with the next few shipments. Thereafter, in June 1998, Shields purportedly told one of Swiss’s buyers that Shields was producing Newsham gilts itself and stopped purchasing them. Another third party who overheard relayed this information to Swiss and informed Swiss that such a process could not produce a 100 percent Newsham pig. In August 1998, Shields delivered 600 more pigs to Swiss. Swiss initially accepted the shipment but reported problems with some of the pigs shortly thereafter. Shields offered to replace the problem-pigs, but Swiss refused and indicated that it would no longer accept any shipments. In December 1998, Shields sued Swiss for breach of contract and sought damages for the 300 pigs rejected in April 1998 and for the remaining deliveries after August 1998. Swiss filed a counterclaim and alleged that Shields breached the contract by failing to provide pigs that complied with the contract’s criteria. The trial court found that both parties repudiated the contract and denied both claims. On appeal, Shields argued that Swiss’s repudiation in August 1998 in which it refused to accept any more shipments breached the whole contract. Swiss argued that it was entitled to repudiate once it learned Shields was using a process that could not produce 100 percent Newsham pigs.

Rule of Law

Issue

Holding and Reasoning (Cook, J.)

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