The Clear Fruit Juice Company purchased a quantity of a special variety of apple that Ely grew in his orchards. The apple was of a type that kept well in winter storage, and the company would market a portion of the apples purchased as fresh fruit and process the remainder into apple juice that it sold under a private brand name. The company purchase represented approximately 50 percent of Ely’s total harvest each year.
Initially, the Clear Fruit Juice Company and Ely entered into a formal, written purchase agreement for each year’s crop. However, over time the agreement became less formal. Eventually it consisted at first of a telephone order for the “usual supply,” and later to an arrangement whereby Ely would deliver the normal quantity to the company each year, and in due course would receive payment at the going market price for the crop. This latter arrangement carried on for a period of about ten years.
In the last year, the president of the Clear Fruit Juice Company fell seriously ill and retired. He had been responsible for the original contracts with Ely, and had made the later informal arrangements for the supply of apples. For many years, the two men had been good friends. The new president of the company moved to the area from a subsidiary corporation and was not aware of the arrangement between Ely and the company. He decided that for the current year he would purchase the company’s apple requirements from another orchard.
Over the course of the summer, Ely heard rumours that an orchard some kilometres distant had acquired a contract to supply his variety of apple to the company, but he did nothing to investigate the matter further. In the fall of that year, he delivered his usual supply in large pallet boxes to the company and placed them in the storage yard. No employees were in the yard at the time, but Ely did not find the fact unusual, as that was typically the case when he made his deliveries in the past. He was not concerned about identification of the crop as each pallet box bore his name and address as well as the variety and quantity.
The yard foreman noticed the apples in the supply yard some time later on the day of delivery, and informed the plant manager. The plant manager did nothing about the apples until the next day, when he informed the company pres-ident. The company president decided to write a letter to Ely requesting him to take back his apples, but it was Friday, so he left the letter until Monday of the next week. Ely received the letter on the Wednesday, some six days after delivery of the fruit to the company.
During the six-day period the apples had remained in the hot sun and had deteriorated from the exposure. Ely refused to take back the apples, and the company refused to pay for them.
Advise the parties of their rights in this case, and determine the probable outcome if Ely should bring an action against the company for the value of the goods.