LIPSHITZ & COHEN
v.
UNITED STATES
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Plaintiffs sought to recover lost profits from the United States based on an alleged breach of contract to deliver approximately 1.5 million pounds of obsolete scrap metal, but when they took delivery the material fell short by roughly half. The Supreme Court affirmed judgment for the United States, holding that the contract's statement of quantities constituted only an estimate rather than a warranty, and that the government was required to exercise only good faith in the transaction, not to deliver exact amounts. The court reasoned that the agreement contemplated the sale of specific lots of material "whether more or less" than the estimated weights listed.
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Mr. Justice McReynolds delivered the opinion of the '• Court.
Plaintiffs in error seek to recover profits, which, it is alleged, would have been realized if the United States had complied with their agreement to deliver approximately 1,530,600 pounds of obsolete material. The cause was heard by the District Judge without a jury. He found the facts and upon them held that the contract had not been broken.
An agent of the United States put out a schedule which stated that certain obsolete material, classed ,as cast iron, cast and forged steel, armor steel, brass, bronze ,and lead, was held for sale at six specified forts. It set out the weights of each class at each place, and was headed — “ List of junk for sale and location of same. The weights as shown below are approximate and must be accepted as’ correct by the bidder.” • Plaintiffs in error made a written offer at the foot of the schedule sheet to pay $1,055, “ for all the above described material, as is where is, for which we are enclosing you Cashier’s check for 20% of the amount — $211—with our option to remove material within six months from acceptance of this bid. ...” This was accepted May 24, 1922. “ At the time the offer was made and accepted the plaintiff did not inspect the material for sale at any of the fortifications, and had no knowledge of such material other than that given by the ' contract. It was later found in junk piles at the various forts.”
In the following July the purchasers began to remove the material and found nearly all items short. Aggregated, these shortages amounted to approximately one-half of the total weight stated in the original schedule, but there is nothing to indicate bad faith.'; They complained but made no effort to repudiate or annul the contract.
Supporting his judgment in favor of the United States,' the District Judge said — “ Since the Government is not in the business of buying and selling and its agents are authorized only to offer for sale such material as has been condemned as obsolete or useless, taking the language of this offer arid acceptance I am of opinion that the contract must be construed as one offering to sell an approximate quantity of such cast iron, brass [cast and forged steel, bronze, armor steel] or lead, and as one offering to sell all of the materials of these descriptions which were on hand at the various points named, the intention being not to make a sale by the pound or ton, but to make an entire sale of specific lots of obsolete material, whether more or less than the weight, and to include all thereof. . . . I am satisfied that they. [plaintiffs] cannot claim that this contract, worded as it was, has been broken because it turned out that there was less, even greatly lees, of some of the materials described as on hand than the description would have led the purchaser to suppose. It is not made to appear that the United States failed or refused to deliver ally of the material that was actually at the forts named at the time the contract was made.”
We approve this construction of the agreement. Applicable principles of law were announced by Mr. Justice Bradley, speaking for the court in Brawley v. United States, 96 U. S. 168, 171. The negotiations had reference to specific lots. The naming of quantities cannot be regarded as in the nature of a warranty, but merely as an estimate of the probable amounts in reference to which good faith only could be required of the party making it.
It is not necessary for us to consider whether the contract is sufficiently formal to comply with the requirements of R. S. 3744.
The judgment of the court below must be
Affirmed.
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Maguire & Co. v. United States, 273 U.S. 67 (U.S. 1927)…rials was invited, and that they would not be sold subject to inspection, the description of the weight of the duck cannot be regarded as in the nature of a warranty. In this aspect the present case is analogous to Lipshitz & Cohen v. United States, 269 U. S. 90, 92. There, an agent of the United States having listed junk for sale at several forts, setting forth the weights and kinds of each, accompanied by a statement that the weights shown were approximate and must be accepted as correct by the bidder, th…
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United States v. Hathaway, 242 F.2d 897 (9th Cir. 1957)…. 2d 621; Shell Oil Co. v. Dye, 7 Cir., 135 F. 2d 365. The decisions have applied this rule to the Government’s “as is, where is” contracts. Maguire & Co., v. United States, 273 U.S. 67, 47 S.Ct. 274, 71 L.Ed. 540; Lipshitz & Cohen v. United States, 269 U.S. 90, 46 S.Ct. 45, 70 L.Ed. 175; United States v. Silverton, 1 Cir., 200 F. 2d 824; American Elastics, Inc., v. United, States, 2 Cir., 187 F. 2d 109. Plaintiff does not now, nor has he ever maintained, that the agreement is or was unclear, or that he m…1 / 2
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Mottram v. United States, 271 U.S. 15 (U.S. 1926)
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- Brawley v. United States, 96 U.S. 168 (U.S. 1877)