Milk Hauling Contract Modifiable at Will, IA High Court Rules

Iowa case law summary by Attorney Richard Clem: Contracts, Modifiable at Will.

Virgil Johnson and Virgil Johnson Trucking vs. Associated Milk Producers, Inc.. IA Contract Law, modifiable at will

Plaintiff trucker hauled milk for defendant dairy co-op sinc 2000 under an oral contract which had been modified over the years. Until 2012, the plaintiff was paid a $100 trip fee, in addition to a rate of $0.50 per hundred pounds of milk. In 2012, defendant informed plaintiff that it would no longer pay the trip fee. Plaintiff objected, but continued to haul milk. Plaintiff submitted invoices for the full amount, including the trip fee. The first such invoice was returned with a note to the effect that it would not be paid. Subsequent invoices were ignored.

Plaintiff then sued, and the district court, Allamakee County, Judge, Margaret L. Lindgren, granted summary judgment to defendant. Plaintiff appealed, and the appeal was eventually heard by the Iowa Supreme Court.

The Supreme Court, Waterman, J., affirmed the district court. Both parties acknowledged that the contract was terminable at will. "Contracts terminable at will are modifiable at will.... A party that unilaterally modifies an at-will contract effectively terminates the old agreement and offers new terms for acceptance."

The cases cited by the plaintiff (and relied upon by the Court of Appeals, which had held in favor of plaintiff) were distinguishable, since they involved contracts that were not terminable at will.

No. 15-0105 (Iowa Oct. 14, 2016).

Please see the original opinion for the court's exact language.


Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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