Autauga Quality Cotton Association v. Crosby

Autauga Quality Cotton Association (Autauga) (plaintiff), a nonprofit cotton-marketing pool, sued the Crosby family farm (Crosby) (defendant) after Crosby sold its promised cotton elsewhere, breaching their marketing agreement. That agreement's liquidated-damages clause measured damages by the gap between the futures-market price after breach and the highest price Autauga received for any cotton that year, which Autauga eventually calculated at about $1.696 million, over 80% of the crop's value and triple Crosby's net earnings that year; Autauga's own expert testified the clause's real purpose was to create a "disincentive" against breach, not to estimate Autauga's actual losses.