Whether parties intend to be bound by a contract, even upon the failure of pricing mechanisms in the contract, is a question of fact properly resolved by the trier of fact.
Appellant and appellee entered into a long term contract for shipment of iron ore. Nearly 30 years after the contract was executed, the two alternative pricing mechanisms in the contract failed. Appellee brought a declaratory action requesting the court to set the proper contract price; appellant contended the contract was no longer enforceable. The trial court ordered performance of the contract by appellant, and that appellant and appellee, if a price could not be negotiated, submit to mediation annually to determine a price. The state supreme court affirmed.
Did the parties intend to be bound by the terms of this contract despite the failure of its primary and secondary pricing mechanisms?
The trial court recognized the failure of the 1957 contract pricing mechanisms. Yet the trial court had competent, credible evidence before it to conclude that the parties intended to be bound despite the failure of the pricing mechanisms. The evidence demonstrated the long-standing and close business relationship of the parties, including joint ventures, interlocking directorates and Armco's ownership of Oglebay stock. As the trial court pointed out, the parties themselves contractually recognized Armco's vital and unique interest in the combined dedication of Oglebay's bulk vessel fleet, and the parties recognized that Oglebay could be required to ship up to 7.1 million gross tons of Armco iron ore per year.