Roth Steel Products v. Sharon Steel Corp.

Facts

In November 1972, Plaintiff contracted with defendant to buy 200 tons of steel through the end of 1973. The price at the time was $148 per ton.  The steel industry wasn’t doing well at the time, so the defendant’s prices were lower than usual. In early 1973, the market conditions changed and increased demand for steel. In March 1973, the defendant notified all buyers that it was discontinuing the price discounts it had given in 1972. The parties here agreed that the plaintiff would pay the agreed price until June 1973, and a price between the agreed price and the higher usual price point for the rest of 1973. The defendant experienced difficulties providing the steel during 1973. In 1974, the parties agreed that the plaintiff would order steel and the defendant would accept the order at the price prevailing at the time of shipment. During 1974 and 1975 the defendant’s deliveries were chronically late, thereby increasing the price to the plaintiff. The plaintiff was originally okay with this because the defendant stated a shortage of raw materials and that they had to divide the supply equally among buyers. The plaintiff found out that the defendant had actually been providing steel to its subsidiary for sale at premium prices. Plaintiff sued.