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Contracts Keyed to Summers
Nanakuli Paving and Rock Co. v. Shell Oil Co., Inc.
Citation:664 F.2d 772
ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
From 1963 to 1974, Nanakuli Paving and Rock Company (“Nanakuli”) (plaintiff) purchased all of its asphalt from Shell Oil Company, Inc. (“Shell”) (defendant) under two long-term supply contracts. In 1974, Nanakuli alleged that Shell breached its 1969 contract by failing to price-protect Nanakuli. For several years, Shell had kept its asphalt prices consistent. But when Nanakuli ordered 7,200 tons of asphalt in 1974, Shell raised the price for asphalt from $44 to $76. Nanakuli argued that price-protection was routinely used in the asphaltic paving trade in Hawaii and it assumed price-protection (although not an express term of their contract) had been incorporated into its 1969 contract with Shell. Moreover, Nanakuli argued that Shell had provided price-protection on two previous occasions. Shell alleged that their contract only provided that it would charge its “posted price” for the asphalt, which permitted it to double the price of asphalt.
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