2007 California Food and Agricultural Code Article 10. Marketing Contracts

CA Codes (fac:54261-54266)

54261.  The association and its members may make and execute
marketing contracts which require the members to sell, for any period
of time, but not over 15 years, all or any specified part of any
product or specified commodity exclusively to or through the
association, or any facilities which are created by the association.
If they contract a sale to the association, title to the product
passes absolutely and unreservedly, except for recorded liens, to the
association upon delivery or at any other specified time which is
expressly and definitely agreed in the contract.



54262.  The contract may provide that the association may sell or
resell any product that is delivered by its members, with or without
taking title to that product, and pay over to its members, the resale
price, after deducting all of the following:
   (a) Necessary selling, overhead, and other costs and expenses.
   (b) Proper reserves for retiring stock, if any.
   (c) Dividends not exceeding 8 percent per annum upon stock or
membership capital.


54263.  Notwithstanding any provisions of the Civil Code, a contract
which is entered into by a member or stockholder of an association
which provides for the delivery to such association of any product
which is produced or acquired by the member or stockholder, may be
specifically enforced by the association to secure the delivery to it
of such product.



54264.  The bylaws or the marketing contract may fix, as liquidated
damages, specific sums to be paid by the member or stockholder to the
association upon the breach by him of any provision of the marketing
contract regarding the sale or delivery or withholding of any
product and may provide that the member will pay all costs, premiums
for bonds, expenses, and fees, if any action is brought upon the
contract by the association.  Such provisions are valid and
enforceable in the courts of this state.  The clauses which provide
for liquidated damages are enforceable as such and shall not be
regarded as penalties.


54265.  If there is a breach or threatened breach of such marketing
contract by a member, the association shall be entitled to an
injunction to prevent the further breach of the contract and to a
decree of specific performance of the contract.  Pending the
adjudication of such an action and upon filing a verified complaint
which shows the breach or threatened breach, and upon filing a
sufficient bond, the association shall be entitled to a temporary
restraining order and preliminary injunction against the member.



54266.  In any action upon such marketing agreements, it shall be
conclusively presumed that a landowner or landlord or lessor is able
to control the delivery of any product which is produced on his land
by tenants or others, whose tenancy or possession or work on such
land, or the terms of whose tenancy or possession or labor on such
land, were created or changed after execution by the landowner,
landlord, or lessor of such a marketing agreement.  In such actions,
the remedies for nondelivery or breach which are provided by this
article shall lie and be enforceable against such landowner,
landlord, or lessor.