ORANGE AND ROCKLAND UTILITIES, INC. V. AMERADA HESS CORP.
59 A.D.2d 110, 397 N.Y.S.2d 814 (1977)
NATURE OF THE CASE: This was a dispute about a requirements contract. Orange (P),
appealed from a judgment in favor of Amerada (D) in P's action for damages as a result of an
alleged breach of a requirements contract.
FACTS: Amerada (D) agreed to supply the requirements of Orange (P) for its fuel oil. The
price of the contract was fixed at $2.14 per barrel. Estimates of P's demand were included
in the contract and those estimates reflected the intent of both parties that P wanted to
use as much natural gas as possible. Within 5 months of the execution of the agreement the
price of oil began a steady and unanticipated increase. In addition, P notified D that its
use of fuel oil would be substantially higher than the estimate given in the contract.
Eventually D agreed only to supply the agreed upon contract estimates and up to a 10%
overage. D performed that part of the contract but refused to deliver more. P sued D. The
trial court determined that P's requirements were not incurred in good faith. P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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