§ 40 — Termination or alteration of contracts

(a) A contractor may not provide, offer, or execute a production contract that allows the contractor to unilaterally terminate the contract unless (i) the termination is the result of a legitimate force majeure as applied to the contractor or (ii) the producer breaches a material term of the contract or voluntarily abandons the contractual relationship. (b) A contractor may not alter the quality, quantity, or delivery times of contract inputs provided to the producer, unless agreed to by the producer. (c) Any cancellation or termination provisions must include specific causes for the cancellation or termination and any circumstances under which the commodity produced under the contract might be rejected in whole or part by the contractor. (d) Any circumstances in which the compensation to be paid by a producer may be discounted or increased shall include specific causes to be clearly and concisely stated.

Legislative History

(Source: P.A. 93-522, eff. 1-1-05 .)