Gulf Oil Corporation and Eastern Air Lines entered a contract under the terms of which Gulf Oil was obligated to supply Eastern with jet fuel according to an established pricing system. In 1973, the Organization for Petroleum Exporting Countries (OPEC) estab lished an oil embargo that precipitated the now-famous energy crisis of the 1970s.
As a result of the oil embargo and the energy crisis, the price of crude oil skyrocketed. Gulf Oil asked Eastern to consent to a price increase over the price agreed to under the original co n- tract. Eastern refused to comply with the increase. Gulf Oil then vowed to stop all jet fuel shipments to Eastern unless Eastern would reconsider its refusal to go along with the price increase.
Eastern filed a lawsuit in federal district court alleging a breach of contract on Gulf Oil's part. Did the American court have jurisdiction over an exclusively American contract affected by an international incident, such as the 1973 oil embargo? Did the court agree that Gulf breached its contract with Eastern Airlines? Explain.
Eastern Air Line, Inc., v. Gulf Oil Corporation, 415 F. Supp. 429 (S.D. FL).