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<law><site_title>Virginia Decoded</site_title><site_url>https://vacode.org</site_url><law_id>346596</law_id><section_number>13.1-329</section_number><catch_line>Marketing contracts; enforcement; inducing breach; spreading false reports</catch_line><edition url="https://vacode.org/2026/" slug="2026" current="TRUE" last_updated="2026-08-02">2026</edition><structure><unit label="title" level="1" order_by="44" identifier="13.1">Corporations</unit><unit label="chapter" level="2" order_by="3" identifier="3">Cooperative Associations</unit><unit label="article" level="3" order_by="2" identifier="2">Agricultural Cooperative Associations</unit></structure><text>
						<section id="a"><p><span class="prefix-number">a.</span> An association and its members may make and execute marketing <span class="dictionary">contracts</span>, requiring the members to sell, for any period of time, not over ten years, all or any specified part of their agricultural products or specified commodities exclusively to or through the association or any facilities to be created by the association. The <span class="dictionary">contract</span> may provide that the association may sell or resell the products delivered by its members, with or without taking title thereto, and pay over to its members the resale price, after deducting all necessary selling overhead, and other costs and expenses, including (a) interest or dividends on its preferred stock, not exceeding eight per centum per annum, (b) reserves for retiring the stock, if any, (c) other proper reserves, and (d) interest or dividends not exceeding eight per centum per annum upon common stock. <a id="paragraph-1292455" class="section-permalink" href="https://vacode.org/13.1-329/#a"><i class="fa fa-link"/></a></p></section>
						<section id="b"><p><span class="prefix-number">b.</span> The bylaws and the marketing <span class="dictionary">contract</span> may fix, as liquidated <span class="dictionary">damages</span>, specific sums to be paid by the member or stockholder to the association upon the breach by him of any provision of the marketing <span class="dictionary">contract</span> regarding the sale or delivery or withholding of products; and may further provide that the member will pay all costs, premium for <span class="dictionary">bonds</span>, expenses and fees in case any action is brought upon the <span class="dictionary">contract</span> by the association; and any such provision shall be valid and enforceable in the <span class="dictionary">courts</span> of this Commonwealth. <a id="paragraph-1292456" class="section-permalink" href="https://vacode.org/13.1-329/#b"><i class="fa fa-link"/></a></p></section>
						<section id="c"><p><span class="prefix-number">c.</span> In the event of any such breach or threatened breach of such marketing <span class="dictionary">contract</span> by a member, the association shall be entitled to an <span class="dictionary">injunction</span> to prevent further breach of the <span class="dictionary">contract</span>, and to a <span class="dictionary">decree</span> of specific performance thereof. Pending the adjudication of such an action, and upon filing a verified complaint showing the breach or threatened breach, and upon filing a sufficient <span class="dictionary">bond</span>, the association shall be entitled to a <span class="dictionary">temporary restraining order</span> and preliminary <span class="dictionary">injunction</span> against the member. <a id="paragraph-1292457" class="section-permalink" href="https://vacode.org/13.1-329/#c"><i class="fa fa-link"/></a></p></section>
						<section id="d"><p><span class="prefix-number">d.</span> Any person who knowingly induces any member or stockholder of an association or corporation organized hereunder to breach his marketing <span class="dictionary">contract</span> with the association or corporation shall be liable to the association or corporation for the full amount of <span class="dictionary">damages</span> sustained by it by reason of such breach; and any person who maliciously and knowingly spreads false reports about the finances or management of any such association or corporation shall be liable to the association or corporation aggrieved in a civil suit for the actual damage which it may <span class="dictionary">sustain</span> by reason of such false reports, and also in the penal sum of $500 for each such act, which may be recovered in the same action. <a id="paragraph-1292458" class="section-permalink" href="https://vacode.org/13.1-329/#d"><i class="fa fa-link"/></a></p></section>
						<section id="e"><p><span class="prefix-number">e.</span> Any person, firm or corporation conducting a public tobacco warehouse within this Commonwealth who knowingly solicits or permits any member of any association organized hereunder to breach his marketing <span class="dictionary">contract</span> with the association by selling, offering for sale, or displaying for sale or for auction such member&#x2019;s products contrary to the terms of any marketing agreement of which such person or any member of such firm or any active officer or manager of such corporation has knowledge or notice, shall be liable to the association aggrieved in a civil suit in the penal sum of not less than $100 nor more than $500 for each such <span class="dictionary">offense</span>; and such association shall be entitled to an <span class="dictionary">injunction</span> against such person, firm or corporation, to prevent further breaches and a multiplicity of actions thereon. In addition, such person, firm or corporation shall pay to the association a reasonable attorney&#x2019;s fee and all costs involved in any such <span class="dictionary">litigation</span> or proceedings at <span class="dictionary">law</span>. Provided, however, that no such action or suit by such an association shall lie unless there has been first served upon such person, firm or corporation after such tobacco has been delivered to the warehouse, and prior to the sale thereof, a notice, in writing, stating that the products of a member of such association are about to be sold, offered for sale or displayed for sale. Such notice may be served by any <span class="dictionary">peace officer</span> or any other person, and the <span class="dictionary">affidavit</span> of the person serving the same shall be prima facie <span class="dictionary">evidence</span> of such service. It shall be the duty of any police officer, sheriff, deputy sheriff, constable or deputy constable of this Commonwealth to serve such notice upon request of any authorized representative of the association, and upon the payment of a fee of fifty cents for each such service. <a id="paragraph-1292459" class="section-permalink" href="https://vacode.org/13.1-329/#e"><i class="fa fa-link"/></a></p></section></text><history>Code 1950, &#xA7;&#xA7; 13-278, 13-279; 1956, c. 428.</history><metadata></metadata></law>
