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Contracts Keyed to Kuney
Publicker Industries v. Union Carbide Corp.
Citation:
17 U.C.C. Rep. Serv. (Callaghan) 989 (1975).Facts
In July 1972, Union Carbide and Publicker executed a contract whereby Union Carbide would supply Publicker with “Spirits Grade Ethanol” for a period of three years. The contract included a formula adjusting the base-price per gallon over the term of the contract and also stated “[i]n no event . . . shall the amount of said increase in the contract price for Ethanol 190 Proof, based upon [Union Carbide]’s increased Standard Cost of Ethylene, cause the price to be paid for Ethanol 190 Proof to exceed the price listed . . .” However, by July 1974, the price of Ethylene had risen exorbitantly due to price hikes from the oil-producing Arab nations. Under the terms of the contract, Union Carbide stood to loose in excess of $5.8 million. Union Carbide informed Publicker the contract price ceilings would need to be amended or it would cease supplying Ethanol to Publicker. This action ensued.
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