Contracts Keyed to Farnsworth
Nanakuli Paving & Rock Co. v. Shell Oil Co.
ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Facts
Plaintiff, a large paving contractor in Hawaii, purchased all of its requirements for asphalt from Defendant under two supply contracts between 1963 and 1974. The written contract provided that the price for the asphalt would be the price posted at the time of delivery. Asphaltic paving contractors in Hawaii bid work at fixed prices and commonly received price protection from their suppliers because government agencies would not accept price escalation clauses in their contracts with the pavers. In 1970 and 1971, Defendant raised its price for asphalt, but protected Plaintiff from the price increase for several months after each announced increase. In 1974, Defendant raised its price for asphalt with one day notice to Plaintiff, and did not offer price protection. Plaintiff sued for breach of its 1969 contract with the Defendant. The jury found in favor of the Plaintiff, but the trial court set aside the verdict. The Court of Appeals reversed and reinstated the jury’s verdict.
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