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Blossom Farm Prods. Co. v. Kasson Cheese Co. - 133 Wis. 2d 386, 395 N.W.2d 619 (Ct. App. 1986)

Rule:

A promise may be unenforceable if it involves conduct offensive to public policy, even though the promise does not actually induce the conduct. If the conduct to be engaged in by the promisor is deemed improper conduct because it is against public policy, the promisee's doing of specific acts to facilitate the improper use is a bar to recovery.

Facts:

Plaintiff Blossom Farm Products Company provided a product, Isokappacase, that could be used as a "starter" in dairy products or as a "yield enhancer." If the product were used as a yield enhancer, federal law prohibited the user from labeling their product as real cheese. Defendant Kasson Cheese Company, Inc. was ordering very large quantities of the product, such that the Blossom knew that it was being used as a yield enhancer. Blossom also knew that that Kasson was labeling its products as "real." Both Kasson and Blossom benefited economically from this volume purchase and use. Blossom sued Kasson on an open-account contract owed by Kasson for its last purchase of Isokappacase. The trial court dismissed the suit of Blossom, holding that the contract was illegal and unenforceable because both parties knew and benefited from Kasson's "illegal use" of Isokappacase. and such enforcement of the contract was against public policy. Blossom petitioned for appellate review the judgment of the trial court, arguing that, inter alia,  the contract for the sale of Isokappacase was not illegal because use of a yield-enhancing agent in cheese by Kasson was not illegal, even though Blossom knew Kasson was misbranding the product and selling it as real cheese. Kasson filed a cross-appeal, contending that the contract between the parties was illegal.

Issue:

Did the trial court err in refusing to enforce the parties' contract after determining that their improper conduct was against public policy?

Answer:

No.

Conclusion:

The apellate court affirmed the trial court's refusal to enforce the parties' contract, finding that such enforcement was against public policy. The Court determined that sufficient facts existed to support the trial court's findings of the Kasson's improper conduct and Blossom's involvement with Kasson, despite being aware of the latter’s improper conduct. The Court concluded that the Kasson's course of dealing, which benefitted both parties, enabled the mislabeling of cheese such that their conduct was offensive to public policy. Therefore, the trial court correctly concluded that the transaction that anticipated such improper conduct was unenforceable. 

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