Nanakuli Paving & Rock Co. v. Shell Oil Co, United States Court of Appeals 1981 1) Facts a) Plaintiff, a large paving contractor in Hawaii, purchased all of its requirements for asphalt from Defendant under two supply contracts between 1963 and 1974. The written contract provided that the price for the asphalt would be the price posted at the time of delivery. b) Asphaltic paving contractors in Hawaii bid work at fixed prices and commonly received price protection from their suppliers because government agencies would not accept price escalation clauses in their contracts with the pavers. In 1970 and 1971, Defendant raised its price for asphalt, but protected Plaintiff from the price increase for several months after each announced increase. c) In 1974, Defendant raised its price for asphalt with one day notice to Plaintiff, and did not offer price protection. 2) History 3) Issue a) Can Nanukuli recover under the price protection i) They provide two theories 1) all material suppliers of the ashpalitc paving trade in Hawaii followed the trade usage of the price protection and the U.C.C. the parties intended it to be incorporated. 2) Price protection was the commercially reasonable standard in Hawaii in 1974. ii) Shell puts up three arguments to defeat the price protection idea. iii) Evidence shows that price protection was was the standard in Hawaii up to this point and the performance of the two parties continues that. iv) The decision to alter that was made by management that was unfamiliar with the trade practices and dealings with Nanakuli. v) The UCC states that if the trade practice is so common that it should be known to Shell then it was their duty to know about it and a deviation would fall to Nanakuli. vi) Nanukuli could recover under either theory according to the court. 4) Judgment: Reversed and Remanded to reinstate jury verdict for Nanakuli.