Limerick of the Week: Gay Jensen Farms Co. v. Cargill, Inc.

Gay Jensen Farms Co. v. Cargill Inc. is a great case for teaching the very important principle that contractual relations, including agency relations, can be implied through conduct.  In this case, the Warren Grain & Seed company defaulted on contracts made with farmers for the sale of grain.  Because Warren was judgment-proof, the plainitffs went after Cargill on the theory that Warren had become Cargill’s agent.  The court found Cargill could be held liable as a principal both because of its creditor/debtor relationship and because of its buyer/supplier relationship with Warren.  Especially in connection with the former relationship, there was strong evidence that Cargill exercised effective control over Warren’s business.

Gay Jensen Farms Co. v. Cargill, Inc.

Warren was deep in the hole,
So it went on the Cargill, Inc. dole.
No simple creditor,
Cargill’s a predator,
And must pay, since it had control.

[Jeremy Telman]