Southern Fuels Co

Southern Fuels Co.and Langham-Hill Petroleum,Inc.are both in the business of buying and selling large quantities of petroleum products.In October,the parties entered into a fixed price contract wherein Southern agreed to purchase 4.2 million gallons of No.2 fuel oil at a specified price per gallon to be delivered in four monthly installments.The contract included a force majeure clause.The first three monthly shipments of oil were purchased by Southern as agreed.In January of the next year,the price of oil in the world market collapsed as a result of Saudi Arabian attempts to regain its share of the world oil market.Southern refused to purchase the last shipment under the contract.Southern informed Langham-Hill that because the drop in world oil prices was caused by Saudi Arabians who were "outside Southern's control" that it was invoking the force majeure clause.Langham-Hill sued for damages in the amount of $306,075.What is a force majeure clause? Southern's basic argument is that it can now buy oil at a substantially lower price.Will Southern succeed on this basis?

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A force majeure clause is a provision in...

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