Lone Star Gas Co. v. Howard Corp.

Howard Corporation entered into a contract with Lone Star whereby Lone Star purchased substantial quantities of gas from Howard at a particular price. The contract contained a “favored nations” clause. Under the substance of this clause, Howard would be paid an increased price for gas if Lone Star purchased gas from others in the same designated area at a higher price than that payable to Howard and when “such [other] price was payable for gas of like character to that being purchased from Howard, and that the gas was taken under substantially similar provisions ..” [Emphasis ours.] The…