William J. Brennan, Jr., Texas Gas Transmission Corporation v…
“ In deciding which increases do and which to not trigger this 'favored nation' clause we would be making an irrational distinction were we to focus upon the mechanics chosen in the Atlantic contract and conclude that the Shell clause was activated by a post-1951 price determination under the Atlantic contract, although it would not have been activated by price increases pursuant to a more mathematically precise formula. ”
William J. Brennan, Jr., Texas Gas Transmission Corporation v…
“ Shell is guaranteed automatic periodic step-increases and in addition, during the last 10 years of the contract term, at Shell's option, prices are to be redetermined to reflect any higher prevailing market prices. Then there is the 'favored nation' clause-also part of the protection afforded Shell. Shell is entitled to the highest price which any of these methods will yield. In contrast, there is no provision allowing Texas Gas the possibility of a price decrease. ”
William J. Brennan, Jr., Texas Gas Transmission Corporation v…
“ The Court of Appeals, in holding that the letter agreement came within the intendment of 'enter (ing) into a contract providing for the purchase * * * of gas,' stressed that Shell's objective was to assure itself a 'top price for its gas' and said that the facts tended to show 'that the intention of the parties was for any higher price paid by (Texas Gas) to another producer to trigger a rise on the Shell contract to the same figure * * *.' 363 F.2d at page 225. ”
