Tuesday, December 3, 2013

Eastern Air Lines, Inc. v. Gulf Oil Corp. case brief

Eastern Air Lines, Inc. v. Gulf Oil Corp. case brief summary
415 F.Sup 429 (1975)
Also see: Eastern Air Lines v. Gulf Oil Corp. Case Brief (2)

CASE SYNOPSIS
Alleging breach of contract, plaintiff airline sought injunctive relief from the district court (Florida) requiring defendant oil company to specifically perform requirements contract to supply aviation fuel, despite defendant's assertion of the commercial impracticability doctrine of the Uniform Commercial Code, U.C.C. § 2-615.

CASE FACTS
Plaintiff airline brought action alleging that defendant oil company breached a longstanding requirements contract to supply aviation fuel. Plaintiff sought injunctive relief requiring specific performance of the contract in spite of an embargo by oil-producing nations that had raised crude oil prices. Defendant sought to repudiate the contract by invoking the commercial impracticability doctrine of the Uniform Commercial Code, U.C.C. § 2-615. Plaintiff contended that it was entitled to specific performance because both parties knew an embargo was imminent, and they had tied the contract price to domestic postings in an oil publication.

DISCUSSION
  • The court agreed and granted injunctive relief, because commercial impracticability was not a defense where there was no evidence that defendant was losing money. 
  • Rather, the evidence showed that defendant was making a profit and its losses were merely paper losses.
CONCLUSION
The court granted permanent injunctive relief to plaintiff and required defendant to specifically perform contract according to its terms, because commercial impracticability was not a defense where there was no evidence that defendant was losing money on the contract.

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