SUNFLOWER ELECTRIC COOPERATIVE, INC. V. TOMLINSON OIL CO
7 Kan App. 2d 131 (1981)
NATURE OF THE CASE: This was a dispute over the delivery of natural gas.
FACTS: Sunflower (P) contracted with Tomlinson (D) for the delivery of natural gas from
D's reserves in the Stranger Creek field. D was to delivery 3 MMCF per day and to develop
its reserves to delivery up to 7 MMCF per day. Both parties constructed their respective
pipelines and from the start, D breached the contract in that it only was able to deliver
88,749 MMCF vs. the 985,500 MMCF that it would have to delivery to meet the minimum
requirement. In July 1976, all production was stopped at the Stranger Creek field and P sued
D. The facts revealed that heavy oil was interfering with the production of the gas and that
in all reality there was a small reservoir or one of limited permeability from the field.
The trial court found that there was no gas left in the field and that the estimates of
reserves when the contract was signed were over optimistic. Eventually the court concluded
that D should be relieved of any liability for damages because of impossibility of
performance and even denied reliance damages to D for the $262,209.55 it had spent. P
appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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