Carmichael v. Adirondack Bottled Gas Corp.

Adirondack Bottled Gas Corporation (Adirondack) (defendant) supplied fuel to the Carmichaels' distributorship under a contract with a "key man" clause automatically terminating the agreement upon Philip Carmichael's death or a change in business ownership; when Philip died, Adirondack continued supplying fuel to Janet (plaintiff) while repeatedly offering to buy the business at roughly half its value, which she refused each time. After she declined its offers, Adirondack abruptly cut off fuel supply, forcing Janet to lay off employees, sell assets, and leave customers without propane; she sued for breach of the covenant of good faith and fair dealing, and a jury awarded her $60,000 in compensatory and $100,000 in punitive damages. Adirondack appealed, arguing no contract existed once Philip's death triggered the key-man termination clause.