Ron Leidholm (defendant) contracted to supply 25,000 bushels of oats to Underwood Farmers Elevator (the Elevator) (plaintiff) at $1.50 per bushel. Leidholm eventually informed the Elevator that drought conditions prevented delivery of the oats. The Elevator refused Leidholm’s request to “buy out” the contract [by paying the difference between the contract price and the existing market price of $1.53 per bushel]. A month later, the Elevator allowed Leidholm to buy out the contract, but by that point, the market price was $2.67 per bushel. Thus, what would have been a $750 debt at the time of Leidholm’s initial request ended up as a $29,750 liability. At the Elevator’s request, Leidholm signed a confession of judgment in the amount of $29,750 plus 12 percent interest. Leidholm later claimed that the Elevator manager called the confession of judgment a mere formality necessary for accounting purposes and promised to work out repayment terms reflecting a reduced liability. Five months later, judgment was entered on the confession of judgment, and the Elevator sought to collect. Leidholm’s motion to vacate the judgment was denied by a North Dakota state court without a hearing. Leidholm appealed.