Mathis v. Exxon Corporation
United States Court of Appeals for the Fifth Circuit
302 F.3d 448 (2002)
Exxon (defendant) sold gasoline to franchisees at a unilaterally set dealer tank wagon (DTW) price substantially higher than the rack price it charged independent wholesalers, even after accounting for the direct delivery service franchisees received; a group of 54 franchisees (plaintiffs) sued, presenting evidence that Exxon planned to drive them out of business and replace them with company-operated stores, while Exxon countered that its DTW price was objectively reasonable given market comparisons. The jury awarded the franchisees damages, and Exxon appealed.
Whether, under Uniform Commercial Code section 2-305, prices in open-price contracts must be set in good faith, including both objective good faith and subjective good faith.