Commercial Law Keyed to Lopucki
Kaiser-Francis Oil Co. v. Producer’s Gas Co
In a contract between Plaintiff and Defendant, Defendant was required to pay for certain quantities from wells in which Plaintiff had an interest. When the resale price of gas decreased, the Defendant did not pay the Plaintiff because he was paying the Plaintiff’s co-owners at reduced prices. Defendant also declined to pay Plaintiff for the small amount of gas taken. The district court granted summary judgment on the issue of liability in favor of Plaintiff. The parties then stipulated to the appropriate damages, interest, and attorney’s fees. Defendant argues on appeal that the force majeure provision in the contract extends to a partial lack of demand caused by market forces; the gas to be supplied by Plaintiff failed to meet the quality specification of the contract; Defendant was not purchasing gas from Plaintiff but rather from Plaintiff’s co-owner; and any take-or-pay payments required under the contract violate ceiling prices set by the Natural Gas Policy Act.
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