Pre-Paid Fuel Contracts

Date: September 5, 2008

People often said that the best friend Wilbur ever had in life was his horse, Ed. Wilbur pampered Ed more than he pampered his own wife and family. Ed had a specially built small horse barn with one supersized stall. The barn was air conditioned in the summertime and heated in the winter. Wilbur went so far as providing a TV for Ed to watch. It seemed that they both had their happiest moments when they were watching the Wheel of Fortune, which they would never miss. Wilbur enjoyed watching the contestants, where Ed seemed to get a particular thrill out of watching Vanna spin the wheel.

Wilbur\’s wife became fed up because Wilbur said he never had money to take her out for dinner but he had plenty of money to pay for the heating bill for the barn. Wilbur told his wife not to be concerned that despite the sharp increase in the cost of oil, that he had locked in a set rate the previous summer and not to be concerned.

Sure enough, Wilbur received a letter from the oil company stating that because of the unprecedented increase in the cost of oil that the oil company could not abide by their agreement and Ed would face an increase of almost $2.50 a gallon for his oil, starting immediately.

Question: Can the oil company raise the price of oil because their own costs had gone up so sharply?

Answer: No. The oil company had contracted with Ed for Ed to pay a said amount over the course of the year, and they must honor that contract. If, for some reason, the international situation was such as the price of oil went way down, Ed would not have gotten the benefits of lower prices per month. It is basically the risk each party took when they entered into the yearlong contract.

Fortunately, Wilbur and Ed will be able to continue to have hours of fun together watching the Wheel of Fortune in the warm comfort of Ed\’s barn.

Disclaimer: The above article is for instructive purposes only and each case is fact sensitive. Consultation with an attorney should be obtained instead of reliance upon the legal issues discussed in this column.

Joe Price
Attorney Joe Price is a seasoned Trial Lawyer serving Northeast, Central and Southeast Pennsylvania for the past forty (40) years. He has handled serious personal injury cases in courts throughout the Federal system including New Jersey and New York. Attorney Price is A.V. Rated by Martindale Hubble. He is Board Certified in Civil Practice by the National Board of Trial Advocacy since 1996.