§ 17-10-214 — Agricultural product marketing contracts

(a) A cooperative and its patron member or patron may make
and execute a marketing contract, requiring the patron member or
patron to sell a specified portion of his agricultural product
or specified commodity produced from a certain area exclusively
to or through the cooperative or facility established by the
cooperative.
(b) If a sale is contracted to the cooperative, the sale
shall transfer title to the product absolutely, except for a
recorded lien or security interest, to the cooperative on
delivery of the product or at another specified time if
expressly provided in the contract. The contract may allow the
cooperative to sell or resell the product of its patron member
or patron with or without taking title to the product, and pay
the resale price to the patron member or patron, after deducting
all necessary selling, overhead and other costs and expenses,
including other proper reserves and interest.
(c) A single term of a marketing contract shall not exceed
ten (10) years, but a marketing contract may be made
self-renewing for periods not exceeding five (5) years each,
subject to the right of either party to terminate by giving
written notice of the termination during a period of the current
term as specified in the contract.
(d) The bylaws or the marketing contract, or both, may set
a specific sum as liquidated damages to be paid by the patron
member or patron to the cooperative for breach of any provision
of the marketing contract regarding the sale or delivery or
withholding of a product and may provide that the member or
patron shall pay the costs, premiums for bonds, expenses and
fees if an action is brought on the contract by the cooperative.
The remedies for breach of contract are valid and enforceable in
the courts of this state. The provisions shall be enforced as
liquidated damages and are not to be considered or regarded as a
penalty.
(e) If there is a breach or threatened breach of a
marketing contract by a patron member or patron, the cooperative
is 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 the action after filing a
certified complaint showing the breach or threatened breach and
filing a sufficient bond, the cooperative is entitled to a
temporary restraining order and preliminary injunction against
the patron member or patron.
(f) Any person who knowingly induces or attempts to induce
any member or patrons of a cooperative organized under this
article to breach his marketing contract with the cooperative,
or who maliciously and knowingly spreads false reports about the
finances or management thereof, shall be guilty of a misdemeanor
and subject to a fine of not less than one hundred dollars
($100.00), and not more than one thousand dollars ($1,000.00),
for each such offense; provided, that this section shall not
apply to a bona fide creditor of such cooperative, or the agent
or attorney of any such bona fide creditor, endeavoring to make
collections of the indebtedness.
(g) In addition to the penalty provided in subsection (f)
of this section, the person, corporation or other entity may be
liable to the cooperative for civil damages for any violation of
the provisions of subsection (f) of this section. Each violation
shall constitute a separate offense and is subject to the
penalties in this subsection and subsection (f) of this section.