April 23, 2015 Practice Points

Washington Court Strictly Enforces Default Provision; Material Breach Can Still Excuse Performance

Recently, Division III of the Washington Court of Appeals strictly enforced a default provision requiring notice and the opportunity to cure, but found that the non-breaching party can still contend a material breach occurred that excused its performance

by Paul R. Cressman Jr.

Recently, Division III of the Washington Court of Appeals strictly enforced a default provision requiring notice and the opportunity to cure, but found that the non-breaching party can still contend a material breach occurred that excused its performance, see DC Farms LLC v. Conagra Foods Lamb Weston, Inc., 179 Wn. App. 205, 317 P.3d 543 (Div. 3, January 30, 2014). A food processor was not excused from providing a contractually-required notice of default and opportunity to cure because it maintained that a farmer’s breach was incurable. Failure to provide the notice of default and opportunity to cure was a breach of contract by the food processor.

DC Farms, an Idaho potato grower, brought a legal action for breach of contract and other claims against Lamb Weston, a processor of frozen potato products, after Lamb Weston claimed to terminate and then refused to perform under a strategic potato supply agreement.

The situation arose after Lamb Weston discovered a broken light bulb in one of DC Farms’ cellars when removing potatoes, and two days later found a broken light bulb in a Tuff-Skin membrane on its potato processing line while DC Farms’ potatoes were being processed. There was a substantial factual dispute as to the extent of glass contamination in the eight cellars of potatoes that were the subject of the parties’ agreement.

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