Shell Oil Co. v. HRN, Inc.
Supreme Court of Texas
144 S.W.3d 429 (2004)
Shell Oil Company (plaintiff) contracted with several hundred dealers (defendants) who leased service stations and bought gasoline from Shell. Under the agreements, the dealers agreed to buy gasoline from Shell at the dealer prices in effect at the time of the purchase. The dealers sued Shell, arguing that Shell did not set the dealer prices in good faith, because they were so high that they put the dealers at a competitive disadvantage and because Shell’s intent was to replace the dealers with more profitable Shell-operated outlets. The trial court granted Shell’s motion for summary judgment, finding that Shell had charged a posted price that was commercially reasonable and that applied uniformly to all dealers. The court of appeals reversed, finding that the dealers had raised factual issues about Shell’s subjective good faith in setting its dealer prices. Shell appealed.
Rule of Law
Holding and Reasoning (Phillips, C.J.)
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