Kaiser v. Producer’s Gas

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Kaiser v. Producer’s Gas
Court 10th Circuit
Citation 870 F.2d 563
Date decided March 8, 1989

Facts

*Kaiser-Francis Oil Co. = "Kaiser" = plaintiff = a seller of natural gas

*Producer’s Gas Co. = "PGC" = defendant = a purchaser & re-seller

*The 2 parties entered into a contract with a force majeure provision in Oklahoma.

*Later, natural gas prices plummeted such that PGC couldn't re-sell the gas. To avoid losing profits, PGC refused to purchase any more gas.

Procedural History

Kaiser sued. The district court granted summary judgment for Kaiser.

Issues

Does a drop in the price of a contracted good constitute a failure of supply or demand constituting a force majeure?

Arguments

PGC argued that it couldn't turn up a profit any more by re-selling natural gas.

Holding

No. A mere change in demand (& the resulting price decrease) doesn't constitute a failure of demand.

Judgment

Affirmed

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