Nanakuli Paving & Rock Co. v. Shell Oil Co., Inc.

Facts

Defendant contracted with Plaintiff to supply asphalt to Plaintiff. The contract set the price as the price posted by Defendant at the time of delivery. For several years Defendant maintained the initial price for Plaintiff. Defendant later increased the price in a letter giving Plaintiff one-day notice of the change. Plaintiff brought a breach of contract suit, claiming that the contract contained an implied price-protection requirement, which was a customary trade practice in the Hawaiian asphalt industry. Defendant countered that no such customary trade practice existed and that the contract terms controlled the price. Plaintiff argued that even if price protection was not a term of the contract, Defendant did not exercise good faith by giving only a one-day notice of the price increase. The jury ruled in favor of Plaintiff. The jury found that Defendant breached the contract by failing to offer price protection. The jury also found that Defendant did not exercise good faith due to its failure to provide advance notice of the new price. Defendant filed a motion for judgment notwithstanding the verdict, and the district court granted that motion. Plaintiff appealed.