Saturday, April 13, 2013

Oglebay Norton Company v. Armco, Inc. case brief

Oglebay Norton Company v. Armco, Inc. case brief summary
52 Ohio St. 3d 232
Appellant sought review of a decision of the Court of Appeals for Cuyahoga County (Ohio), which affirmed trial court's ordering appellant's specific performance of contract with appellee after the contract's pricing mechanisms failed.

-Appellant and appellee entered into a long term contract for shipment of iron ore. -Nearly 30 years after the contract was executed, the two alternative pricing mechanisms in the contract failed.
-Appellee brought a declaratory action requesting the court to set the proper contract price; appellant contended the contract was no longer enforceable.
-The trial court ordered performance of the contract by appellant, and that appellant and appellee, if a price could not be negotiated, submit to mediation annually to determine a price.
-The state supreme court affirmed.

The court found sufficient evidence supporting the trial court's conclusion that the parties intended to be bound by the contract even if the pricing mechanisms failed.

The court also held that specific performance was necessary, as it would have been difficult to determine damages given dramatic fluctuations in the cost of iron ore shipment, and the fact that the contract was long term.

-The actions of the parties may show conclusively that they have intended to conclude a binding agreement, even though one or more terms are missing or are left to be agreed upon.
-In such cases courts endeavor, if possible, to attach a sufficiently definite meaning to the bargain.
-An offer that appears to be indefinite may be given precision by usage of trade or by course of dealing between the parties.
-Terms may be supplied by factual implication, and in recurring situations the law often supplies a term in the absence of agreement to the contrary.

OUTCOME: Decision affirmed, as sufficient evidence supported the trial court's conclusion that appellant and appellee intended to be bound by their contract even if contract's pricing mechanisms failed. Also, specific performance was necessary, as a determination of damages would have been difficult in this case.

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