Contract Case Analysis: Shell Oil Co. v. US, 17-1695

CONTRACT CASE ANALYSIS
Shell Oil Co. v. US, 17-1695
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Shell Oil Co. v. US, 17-1695
Case Summary
Shell Oil Company claimed that the United States Government (USG) had breached contracts signed during the World War II- era. During this dispensation, USG long term contracts with oil companies that they will be purchasing a significant quantity of oil to support its military campaigns in WWII (US Courts, 2018). However, notwithstanding the contract, the USG later sued the oil firms for hazardous waste cleanup. The defendant (oil companies) argued that USG was partially liable for the cleanup costs based on the interpretation and language used in the contract that was meant to secure oil supply for the US war efforts (Shell Oil Co. v.United States, 2017). In the determination, The Court of Federal Claims awarded $100 as compensation for damages incurred.
Case Background
Back in 1942 and 1943, USG signed a contract with oil companies in which the government committed to purchasing avgas during the WWII period. Besides, the terms of the avgas contract stipulated that the government would purchase significant amounts of avgas, and would further empower the oil companies through construction of new refineries to boost their avgas production capacity. Due to the contract, avgas production went up 12 fold during the WWII dispensation. Avgas production utilizes over 98% of sulfuric acid which is used as a catalyst (Shell Oil Co. v. United States, 2017). Alkylation process dilutes sulfuric acid thereby turning it into a recyclable by product. Nonetheless, the avgas contracts did not place a ceiling on how the spent alkylation acid would be handled. Oil companies were unable to reprocess all the spent alkylation acid due to the Governments directive for prioritization of production (US Courts, 2018). As a result, the companies ended up dumping the surplus spent alkylation acid thereby prompting the litigation.
Case Analysis
In this case, the plaintiff (claimant) was the United States Government whereas the defendant was Shell Oil Co. (representing oil firms). In this analysis, I will argue in favor of the defendant(Shell Oil Co.).The following arguments are presented in favor ofthe defendant:
1 The Court should usehistorical precepts of contractual interpretation and subsequently use themin the evaluation and allocation of cleanup costs premised on the language and wording used in the contract. In my considered legal opinion, the USG misunderstood the ...