§ 21-1304 — Cooperative corporation; contracts with members; provisions; damages for breach

The contracts mentioned in section 21-1303 may require the members to sell, for any period of time not over five years, all or a stipulated part of their specifically enumerated products through the association or to buy specifically enumerated supplies exclusively through the association, but in such case a reasonable period during each year after the first two years of the contract shall be specified during which any member, by giving notice in prescribed form, may be released from such obligation thereafter. In order to protect itself in the necessary outlay, which it may make for the maintenance of its services, and likewise to reimburse the association for any loss or damage which it or its members may sustain through a member's failure to deliver his products to, or to procure his supplies from the association, the association may stipulate that some regular charge shall be paid by the members for each unit of goods covered by such contract, whether actually handled by the association or not. In case it is difficult or impracticable to determine the actual amount of damage suffered by the association or its members through such failure to comply with the terms of such contract, the association and the members may agree upon a sum to be paid as liquidated damages for the breach of the contract, the amount to be stated in the contract.

Legislative History

Source: Laws 1925, c. 79, § 3, p. 245; C.S.1929, § 24-1303; R.S.1943, § 21-1304.