Bayway Refining Co. C. Oxygenated Marketing & Trading A.G.

215 F.3d 219 (2nd Cir. 2000)

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Nature of the Case

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Facts

P contracted to sell to D 60,000 barrels of a gasoline blendstock. D faxed P a confirmation letter. P then faxed its confirmation to D the next day. The P General Terms and Conditions were not transmitted with P's fax, but Paragraph 10 of its General Terms and Conditions states: Buyer shall pay Seller the amount of any federal, state and local excise, gross receipts, import, motor fuel, Superfund and spill taxes and all other federal, state and local taxes however designated, other than taxes on income, paid or incurred by seller directly or indirectly with respect to the oil or product sold hereunder and/or on the value thereof. D did not object to P's acceptance or to the incorporation of its General Terms and Conditions (which included the Tax Clause). D accepted delivery of the barrels. The Internal Revenue Code imposes an excise tax, payable by the seller, on the sale of gasoline blendstocks 'to any person who is not registered under [26 U.S.C. § 4101]' for a tax exemption. 26 U.S.C.A. § 4081(a)(1)(A)(iv). P learned that D was not registered with the Internal Revenue Service for the tax exemption. The transaction, therefore, created a tax liability of $ 464,035.12, which P paid. P demanded payment of the $ 464,035.12 in taxes. D denied that it had agreed to assume the tax liability and refused to pay that invoice item. P sued D alleging breach of contract. P moved for summary judgment. It was granted. The court concluded that D failed to carry its burden of proving that the Tax Clause materially altered the contract. D appealed.