415 F. Supp. 429 (S.D. Fla. 1975)
Eastern Air Lines v. Gulf Oil Corp.
Whether a supplier can refuse to perform a requirements contract for jet fuel by invoking commercial impracticability and alleged lack of good faith by the buyer, or whether the contract remains enforceable under UCC § 2-306 with the buyer's demands constrained by good faith and the "unreasonably disproportionate" limitation.
Under UCC § 2-306(1), a term measuring quantity by the buyer's requirements means such actual requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or to normal prior requirements may be tendered or demanded. Requirements contracts are enforceable and not void for indefiniteness because quantity is supplied by the good-faith standard. A seller's performance may be excused under UCC § 2-615 only if an unexpected contingency, the non-occurrence of which was a basic assumption of the contract, renders performance commercially impracticable; increased cost alone, even if substantial, does not suffice absent severe hardship fundamentally altering the nature of performance. Where the contract includes a posted-price or open-price term, the setting or application of price must be in good faith (UCC § 2-305). Equitable relief, including specific performance or injunction, may be granted under UCC § 2-716 when goods are not readily coverable and damages are inadequate.
The court enforced the requirements contract, holding that Eastern's demands reflected good-faith requirements not unreasonably disproportionate to prior needs and that Gulf was not excused from performance by commercial impracticability. The court granted injunctive relief compelling Gulf to continue supplying fuel per the contract terms.
Eastern Air Lines is a leading modern exposition of requirements contracts under UCC § 2-306. It teaches that: (1) requirements contracts are enforceable despite open-ended quantity, because good faith and the "unreasonably disproportionate" cap cabin buyer discretion; (2) commercial impracticability under § 2-615 is narrow—price spikes and market stress do not, without more, excuse performance when the risk of fluctuation was foreseeable and addressed by the contract's pricing mechanism; and (3) courts may grant specific performance or injunctive relief when goods are hard to cover and damages are inadequate. The case is routinely cited in contracts courses for its clear articulation of good-faith demand and its careful separation of economic hardship from true impracticability.