Texpar Energy, Inc. v. Murphy Oil Usa, Inc.

45 F.3D 1111 (7th Cir. 1995)

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Nature of the Case

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Facts

TexPar contracted to purchase 15,000 tons of asphalt from Murphy at a price of $53 per ton. TexPar then contracted to sell the 15,000 tons to Starry Construction at a price of $56 per ton. TexPar stood to profit $45,000 if both contracts were performed. The price of asphalt can be very volatile, and the price rose rapidly in June 1992, and the sale price of $53 per ton lost its attractiveness very quickly. In May and early June TexPar took delivery of 690 tons, but on June 5 Murphy stopped its deliveries and notified TexPar that its sales manager lacked the authority to enter the contract. By then the price was $80 per ton. Starry insisted that TexPar deliver the full 15,000 tons at $56 per ton. With TexPar’s approval, Starry and Murphy negotiated directly and agreed upon a price of $68.50 per ton. TexPar agreed to pay Starry the difference between the new price of $68.50 and the original $56 per ton. TexPar was thus $191,000 out of pocket on the transaction. TexPar sued Murphy for the market price on the day of repudiation, which was $80 per ton. The trial judge instructed the jury under UCC 2-713, and the jury awarded P the difference between the contract price and the $80 market price for 14,310 tons or $386,370. D appealed.