Bayway Ref. Co. v. Oxygenated Mktg. & Trading A.G.

215 F.3d 219, 2000 U.S. App. LEXIS 12562, 41 U.C.C. Rep. Serv. 2d (Callaghan) 713

 

RULE:

A material alteration is one that would result in surprise or hardship if incorporated without express awareness by the other party.

FACTS:

Plaintiff seller brought a breach of contract action against defendant seller seeking to recover the amount of federal excise tax it paid on a petroleum transaction with defendant. The trial court granted summary judgment for plaintiff, holding that under the parties’ contract that defendant was responsible for paying the amount of the excise tax to plaintiff. Defendant appealed, claiming that there were issues of fact regarding whether the contract's tax clause materially altered the contract under N.Y. U.C.C. Law § 2-207(2)(b), and that the trial court improperly admitted evidence of custom and practice in the petroleum industry.

ISSUE:

Did the defendant meet the burden of proving that the parties’ contract’s tax clause materially altered the contract?

ANSWER:

No

CONCLUSION:

Summary judgment for the plaintiff seller was affirmed because defendant buyer failed its burden to prove that the parties’ contract’s tax clause materially altered the contract, and the trial court properly admitted evidence concerning petroleum industry custom and practice.

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