Golden Peanut Co. v. Bass

Golden Peanut Company Golden Peanut is a “sheller” engaged in the business of purchasing peanuts. Neon Earl Bass, Jr., Dry Branch Farms, Inc. and Varner-Bass Enterprises Plaintiffs are farmers who agreed to sell peanuts to Golden Peanut. When a dispute arose over payment, Plaintiffs brought suit. Golden Peanut answered and raised, among its other defenses, the illegality of the sales contracts. At trial, both Golden Peanut and Plaintiffs introduced parol evidence in support of their contentions. The jury returned a verdict in favor of Plaintiffs. The Court of Appeals reversed based upon the trial court’s failure to give a requested charge on accord and satisfaction. However, the court rejected Golden Peanut’s claims that the contracts were illegal and its contention that Plaintiffs’ parol evidence was inadmissible. Golden Peanut Co. v. Bass, 249 Ga. App. 224, 237-240 4, 5 547 SE2d 637 2001. We granted Golden Peanut’s petition for certiorari to review those two holdings of the Court of Appeals.

1. Golden Peanut contends that the contracts failed to comply with applicable federal statutory and regulatory authority because a final price for Plaintiffs’ peanuts was not specified. Instead, the agreement was to pay a “floor price” for the peanuts, with an “understanding that a final price could be ‘locked in’ later in the year. . . . The prescribed method for ‘locking in’ the actual price would be slightly different for quota peanuts and for additional peanuts.” Golden Peanut Co. v. Bass, supra at 225. As the Court of Appeals noted, the federal statutes and regulations in force at the time specified that an agreement should contain certain provisions, including “the final contract price” and an express prohibition against changing that price. Golden Peanut Co. v. Bass, supra at 237 4. Because Golden Peanut’s contracts with Plaintiffs did not include those provisions, they did not comply with that federal authority. However, the decisive question is whether that failure renders the agreements illegal so that Golden Peanut’s promise to pay Plaintiffs according to the formula established by parol evidence is unenforceable. “Illegal promises will not be enforced in cases controlled by the federal law.” Kaiser Steel Corp. v. Mullins, 455 U. S. 72, 77 II 102 SC 851, 70 LE2d 833 1982.