Wednesday, December 25, 2013

Nissho-Iwai Co. v. Occidental Crude Sales case brief

Nissho-Iwai Co. v. Occidental Crude Sales case brief summary
729 F.2d 1530 (1984)

Defendant appealed from a jury verdict of the United States District Court for the Southern District of Texas, awarding plaintiff contract damages and fraud damages arising from defendant's failure to perform a crude oil agreement.

Plaintiff was awarded damages in contract and fraud for defendant's failure to deliver oil. Defendant argued the judge erred in the first trial by recalling the jury to reconsider its verdict.


  • The court held the judge had broad discretion to order a new trial when he detected confusion in the verdict. 
  • As to the second trial, defendant argued, first, the judge erred in charging the jury about the force majeure clause. 
  • The court held the instruction was proper. 
  • Defendant argued next that both parties waived performance requirements. 
  • The court concluded, however, the instructions permitted and the evidence supported a finding of unilateral waiver. 
  • The court found the damage award was suspect. 
  • Plaintiff's lost profits during a period when the contract was suspended were not compensable. 
  • The court also held that defendant was not liable for fraud. 
  • Plaintiff failed to prove that fraud, rather than breach of contract, caused the injuries.
The court affirmed the judgment that defendant breached its contract with plaintiff, holding that there was no reversible error; however it reversed the damage award, and remanded for a new trial limited to determining contract damages. Finally, the court reversed the fraud verdict and award of punitive damages.

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