Ag Lending: Could Selling Crops Be a Crime?

Ag Lending: Could Selling Crops Be a Crime? In an agriculture heavy state such as Indiana, lenders necessarily will have a certain portion of its lending dedicated to agricultural and farming operations.   There are certain protections for lenders under both Indiana law and federal law, which, while easy to follow, may not often be employed by lenders. The Uniform Commercial Code (“UCC”) was written to provide guidance concerning commercial transactions, and has been adopted in some fashion throughout the United States, including Indiana.  States are free, however, to adopt certain other provisions or deviations from the UCC.  As a general rule under the UCC, someone who buys a product in the “ordinary course” of the seller’s business buys that product free from any security interest or lien that a lender may have attached to that product.  This is true even if the lien is perfected and the buyer knows about the lien. Historically, there was an exception to this rule for “farm products”, which includes crops.  Therefore, under the UCC, a wholesale buyer of a farmer’s crops bought those crops subject to any lender’s lien. Congress, however, passed a federal law in 1985 to override this UCC exception, and stated that a buyer who in the ordinary course of business buys a farm product from a seller engaged in farming operations buys that farm product free of any lender’s lien. As with every rule, there are exceptions, and this one is no different.  This same federal law provides that the buyer of farm products will take the farm products subject to the lender’s lien if the buyer has been...

Mediation? Arbitration? Same Thing, Right?

Mediation? Arbitration? Same Thing, Right? There is often some confusion on the part of business clients concerning the differences between mediation and arbitration.  Some people tend to use the terms interchangeably, but in actuality mediation and arbitration are quite different. In a mediation, typically the parties hire a third party “neutral” person who, while she may be a lawyer, does not need to be in order to help facilitate settlement discussions.  Sometimes the attorneys involved will suggest a mediation as a way to have their clients listen to a neutral third party describe the strengths of the opponent’s case and the weaknesses of their own client’s case so that the parties can try to reach a resolution before incurring significant costs.  As previously noted in this blog, you are not sacrificing anything legally by engaging in mediation or other forms of settlement negotiations.  That is because if the case does not settle at mediation, any judge or jury who ultimately tries the case in court will never hear what offers of compromise may have been made by the parties. It is important to remember that in a mediation, the mediator makes no decisions.  Rather, all of the ultimate decisions about whether to settle, and for how much, are left to the parties.  The mediator cannot force a settlement on anyone.  The mediator can make suggestions, and the parties can agree on different ways to mediate.  However, ultimately it is up to the parties to decide if the case will settle or not.  This is one of the big advantages of mediation, because the parties control their own destinies.  After...

Ten Years to Fight Over a Contract?

Ten Years to Fight Over a Contract?! We are constantly emphasizing to our clients the importance of reading and understanding all of their contracts before signing them.  We also continually counsel our clients about the incredibly slow pace of litigation and how resolving business disputes through the courts can take many years.  A recent decision by the 7th Circuit Court of Appeals (which would hear federal cases under Indiana law) serves as a good illustration of these points: In that, the 7th Circuit reversed a jury’s award of $1,500,000.00 in favor of a sales representative, and found that the plain language of that representative’s contract showed that he was only entitled to $54,000.00 in commissions.  The reason for the reversal was that his contract very clearly stated that in order for the sales person to receive commission credit under the employer’s previous compensation plan, any sale must close on or before December 25, 2005.  The sale at issue did not close until March, 2006.  During the original trial, the trial court allowed evidence to be introduced concerning what was intended by the parties, as opposed to simply enforcing the plain terms of the contract.  With the introduction of that extra evidence, the jury awarded $1,500,000.00.  The Court of Appeals reversed that ruling and directed that the employee was only entitled to $54,000.00. A few interesting points that came out of this recent decision include the fact that this dispute has been ongoing for ten years.  For some perspective, the sale at issue closed about 18 months before the introduction of the iPhone and the decision was entered on July...

Concerns for Small Business: Insurance Can Be a Savior

  Concerns for Small Business: Insurance Can Be a Savior Today’s post focuses more on a practical business reality as opposed to a purely legal issue.  Because we are celebrating Small Business Week, we will keep this blog post short as we know that all small business owners such as ourselves are always pressed for time and struggle to get everything accomplished while maintaining some sort of an otherwise normal life. Over the past few years the insurance issue has been discussed at length in the media and among small business owners as the health insurance requirements have continued to increase and put administrative demands and financial pressures on businesses of all size.  Aside from health insurance, worker compensation, and general liability insurance, there are a number of other insurance products that are available to small businesses that can help provide some protection to the financial strength of the business as well as help to minimize the disruptions caused by unforeseen circumstances that every business will face. Most small businesses do not have the financial capital or reserves to deal with unforeseen issues that arise that necessitate having to retain attorneys, perhaps paying for accidents or even failed contractual relationships.  Dealing with these issues requires the small business to dip into its operations accounts and thereby keeps that money from being used for more useful purposes such as growing the business or compensating the owners and employees for work previously performed.  As we all know attorneys’ fees can also cause a significant disruption in a business’s financial planning, as most small businesses do not set aside a legal budget...
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