Columbia Nitrogen Corp. v. Royster Co.

United States Court of Appeals for the Fourth Circuit451 F.2d 3 (1971)

Facts

Columbia Nitrogen Corp. (Columbia) (defendant), a nitrogen and mixed fertilizer manufacturer, sold its products to Royster Co. (Royster) (plaintiff) for several years. In 1966, Royster began to manufacture phosphate. Columbia agreed to purchase a minimum amount from Royster for three years. The contract set the price per ton and contained a merger clause that excluded any “verbal understanding” from the terms of the contract. When phosphate prices dropped steeply in the first year of the contract, Columbia failed to purchase the agreed amount and Royster was forced to sell the remaining phosphate at a lower price. Royster sued Columbia for damages. Columbia attempted to present evidence showing that Columbia and Royster, in their prior dealings, often deviated from the contract price. Columbia also proffered evidence that price and quantity terms in the mixed fertilizer industry were treated as projections and were subject to modification according to market fluctuations. The district court excluded Columbia’s evidence of prior dealing and trade usage. Judgment was entered for Royster and Columbia appealed the district court’s exclusion of its evidence.

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