Publicker Industries Inc. v. Union Carbide Corporation

17 U.C.C. Rep. Serv. (Callaghan) 989 (1965)

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Nature of the Case

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Facts

In July of 1972, D and P entered into a contract for D supply P with a substance called 'Spirits Grade Ethanol' for a period of three years. The major cost element of Ethanol is Ethylene. The price escalator in the agreement called for a base price of $.2450 per gallon to be adjusted by four-tenths of one cent ($.004) per gallon for each one-tenth of one cent ($.001) per pound increase or decrease from the 'base value' in the average of Seller's Standard Cost for Ethylene. In no event was the price to exceed a schedule that increased 1 cent per year to a maximum price of $.2850 per gallon in 1977. Along came the 1973 Middle East War and the oil embargo. By July of 1974, the price of Ethylene had risen so much that D insisted on removing the price ceilings. Unless P would agree, D would cease deliveries. P brought this action to require that D specifically perform the contract. D argues that the very substantial and allegedly unforeseen rise in the price of Ethylene invoked the 'force majeure' clause of the contract, which relieved it of its duty to perform. D also argued impracticability under UCC 2-615.