The Kennec Journal reports on the law firm Linnell, Choate and Webber is being sued by Downeast Energy Corp. for breaching an oil purchase contract. The firm allegedly locked in the price of oil over the summer when it was at $4.36, but is now refusing to take any more oil at that price, which is nearly double the current rate.
The firm is claiming that there was not in fact a contract because Downeast did not provide a signed confirmation of the agreement. However the firm has accepted the delivery of some oil since the agreement was made.
With contract disputes, what was actually agreed to will decide. However here the firm is claiming the contract was never ratified. The Court will first need to look at the ‘who did what and when’ to determine if the contract was actually formed. The fact that the firm did accept oil deliveries, and presumably paid the higher price will go against them. The court will also look to see what is the normal practice in this type of situation, e.g., is a signed confirmation from the oil supplier the norm.
Perhaps in the end they will just settle, and the firm will pay a reduced amount for their oil.
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