---
kind: "section"
citation: "7 U.S.C. § 7216"
title: "7"
title_heading: "Agriculture"
number: "7216"
heading: "Violations of contract"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/7/7216"
units:
  - "Chapter 100 — Agricultural Market Transition"
  - "Subchapter II — Production Flexibility Contracts"
---

# §7216. Violations of contract

- (a) **Termination of contract for violation—** Except as provided in [subsection (b)](#b), if an owner or [producer](/usc/7/7202.md?p=12) subject to a [contract](/usc/7/7202.md?p=3) violates a requirement of the [contract](/usc/7/7202.md?p=3) specified in [section 7211(a) of this title](/usc/7/7211.md?p=a), the [Secretary](/usc/7/7202.md?p=13) shall terminate the [contract](/usc/7/7202.md?p=3) with respect to the owner or [producer](/usc/7/7202.md?p=12) on each farm in which the owner or [producer](/usc/7/7202.md?p=12) has an interest. On the termination, the owner or [producer](/usc/7/7202.md?p=12) shall forfeit all rights to receive future [contract payments](/usc/7/7202.md?p=6) on each farm in which the owner or [producer](/usc/7/7202.md?p=12) has an interest and shall refund to the [Secretary](/usc/7/7202.md?p=13) all [contract payments](/usc/7/7202.md?p=6) received by the owner or [producer](/usc/7/7202.md?p=12) during the period of the violation, together with interest on the [contract payments](/usc/7/7202.md?p=6) as determined by the [Secretary](/usc/7/7202.md?p=13).
- (b) **Refund or adjustment—** If the [Secretary](/usc/7/7202.md?p=13) determines that a violation does not warrant termination of the [contract](/usc/7/7202.md?p=3) under [subsection (a)](#a), the [Secretary](/usc/7/7202.md?p=13) may require the owner or [producer](/usc/7/7202.md?p=12) subject to the [contract](/usc/7/7202.md?p=3)—
  - (1) to refund to the [Secretary](/usc/7/7202.md?p=13) that part of the [contract payments](/usc/7/7202.md?p=6) received by the owner or [producer](/usc/7/7202.md?p=12) during the period of the violation, together with interest on the [contract payments](/usc/7/7202.md?p=6) as determined by the [Secretary](/usc/7/7202.md?p=13); or
  - (2) to accept a reduction in the amount of future [contract payments](/usc/7/7202.md?p=6) that is proportionate to the severity of the violation, as determined by the [Secretary](/usc/7/7202.md?p=13).
- (c) **Foreclosure—**
  - (1) **Effect of foreclosure—** An owner or [producer](/usc/7/7202.md?p=12) subject to a [contract](/usc/7/7202.md?p=3) may not be required to make repayments to the [Secretary](/usc/7/7202.md?p=13) of amounts received under the [contract](/usc/7/7202.md?p=3) if the [contract acreage](/usc/7/7202.md?p=4) has been foreclosed on and the [Secretary](/usc/7/7202.md?p=13) determines that forgiving the repayments is appropriate to provide fair and equitable treatment.
  - (2) **Resumption of operation—** This subsection shall not void the responsibilities of the owner or [producer](/usc/7/7202.md?p=12) under the [contract](/usc/7/7202.md?p=3) if the owner or [producer](/usc/7/7202.md?p=12) continues or resumes operation, or control, of the [contract acreage](/usc/7/7202.md?p=4). On the resumption of operation or control over the [contract acreage](/usc/7/7202.md?p=4) by the owner or [producer](/usc/7/7202.md?p=12), the provisions of the [contract](/usc/7/7202.md?p=3) in effect on the date of the foreclosure shall apply.
- (d) **Review—** A determination of the [Secretary](/usc/7/7202.md?p=13) under this section shall be considered to be an adverse decision for purposes of the availability of administrative review of the determination.

## Source credit

(Pub. L. 104–127, title I, § 116, Apr. 4, 1996, 110 Stat. 903.)