185.41 Cooperative contracts.

(1) If otherwise lawful, contracts for any of the following purposes, whether written or contained in the bylaws, are valid when made between an association and any member in which such member agrees to:

(a) Sell, market or deliver all or any specified part of products produced or to be produced either by the member or under the member's control to or through the association or any facilities furnished by it.

(b) Authorize the association or any facilities furnished by it to act for the member in any manner with respect to all or any specified part of such products and any services to be furnished by the member.

(c) Buy or procure all or a specified part of goods or services from or through the association or any facilities furnished by it.

(d) Authorize the association or any facilities furnished by it to act for the member in any manner in the procurement of goods or services.

(2) The term of such contracts may not exceed 5 years, but they may be made self-renewing for periods not exceeding 5 years each, subject to the right of either party to terminate at the end of the original and each renewal term upon giving written notice of such termination during a period specified in such contract. Such period shall be of at least 30 days' duration during the last year of each term. The association shall furnish to each member-maker a completed original or copy of the member-maker's contract, and on the member-maker's request at any time shall promptly furnish the member-maker information as to the member-maker's rights of termination. The 5-year limitation herein contained shall not apply to contracts for the furnishing of electric energy or service involving an investment by the vendor in fixed assets to be amortized over a longer term.

(3) Such contract may require liquidated damages to be paid by the member in the event of a breach of the contract. Liquidated damages may be either a percentage of the value of the products, goods, or services, or a specific sum, but neither may be more than 30 percent of the value of the products, goods, or services, subject to the breach. Where a specific sum is provided as liquidated damages, but such sum exceeds 30 percent of the value of the products, goods, or services which are the subject of the breach, then the contract shall be construed as providing an amount equal to 30 percent.

(4) If any contract authorized by sub. (1) (a) or (b) contains an assignment to the association of any part or all of funds due or to become due the member during the life of the contract for any product produced or to be produced by the member or for any services performed or to be performed in producing any product, any person who accepts or receives such product from the member is bound by such assignment after receiving written notice from the association or the member of the amount and duration of such assignment. However, as to any seasonal crop, if no funds are paid or become payable by any person under such an assignment for a period of 2 consecutive years during the life of the contract, thereafter the assignment shall not be binding upon any person who receives or accepts such product from the member until the assignment is reaffirmed by the member in writing and written notice thereof is given by the association or the member. Any such reaffirmation shall continue to be effective during the life of the contract until another such lapse of 2 consecutive years shall occur.

History: 1985 a. 30 s. 42; 1993 a. 482; 2009 a. 177.