Nanakuli Paving & Rock Co. v. Shell Oil Co.
United States Court of Appeals for the Ninth Circuit
664 F.2d 772 (9th Cir. 1981)
Nanakuli Paving (plaintiff) contracted with Shell Oil (defendant) for asphalt priced at Shell's posted price at delivery, and Shell maintained the initial price for years before raising it via a letter giving Nanakuli only one day's notice; Nanakuli sued for breach, arguing the Hawaiian asphalt industry customarily included implied price protection (honoring the old price for already-committed work) and that, even absent an implied term, Shell breached its duty of good faith by giving inadequate notice. The jury found for Nanakuli on both theories, but the district court granted Shell's motion notwithstanding the verdict, and Nanakuli appealed.
Whether courts can admit evidence of customary trade usage and course of performance for parties to demonstrate implied contract terms.