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Contracts Keyed to Blum
Chronister Oil Co. v. Unocal Refining and Marketing
Citation:
34 F.3d 462 (1994)Facts
In February, Chronister agreed to sell 25,000 barrels of gasoline to Unocal for 60.4 cents a gallon. The gasoline was to be delivered around the first five days of March. Chronister arranged to have Enron, another oil trader, deliver the gasoline. Enron delivered on March 5th, but the pipeline owner refused to accept it because it had too much water in it. Unocal then demanded assurances from Chronister. Chronister arranged to send new gasoline, but said it would not be ready until mid-March. Unocal turned down the offer and used gasoline it already had in its inventory to fulfill its needs. The cost of the gas in its inventory was 63.14 cents per gallon. In the mean time, Chronister purchased substitute gasoline from Enron and, when Unocal refused it, sold it at 55.3 cents a gallon. If Unocal had bought the gas out on the market instead of its own supply, it would have cost around 55 cents a gallon. The court ruled that Chronister breached the contract. This portion deals with the determination of damages.
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Intro to Damages and Expectation Damages