DAVIS SEWING MACHINE COMPANY
v.
UNITED STATES
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Davis Sewing Machine Company sought to recover prospective profits from a contract to manufacture Very pistols for the Government after the Government terminated the contract following the Armistice and the parties executed a supplemental agreement. The Supreme Court affirmed the lower court's judgment denying recovery of lost profits, holding that the original contract's termination clause did not include prospective profits as a remedy, and the supplemental agreement contained an express waiver of any claims to such profits.
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Mr. Justice Sutherland delivered the opinion of the Court.
This suit was brought to recover upon a contract between appellant and the United States to manufacture a large number of Very pistols. It was stipulated in the contract that the Government might terminate it in whole or in' part at any time and in that event certain enumerated payments were to be made, not. including, however, prospective profits upon uncompleted articles. The contract provided that upon written notice the Government might make changes in the specifications, increased cost, if any, to be paid, and, for any delay in consequence thereof, a corresponding extension of time for the performance of the contract to be allowed. After the Armistice appellant was reque. ted to suspend work with a view to the negotiation of a supplemental contract providing for the cancellation, settlement and adjustment of the existing contract. Subsequently, appellant filed a claim; and a partial payment supplemental contract was executed, by which the Government agreed to make appellant, an advance payment and speedily determine and pay certain specified items. Appellant agreed that it would not perform further work or services, or incur further expense in connection with the performance of the uncompleted part of its original contract, and expressly waived “ all claim to the prospective profits which he [it] might have made from the performance of that portion of said original' contract which under the terms of this supplemental' agreement will not be performed.” The advance payment was made,. and the court below found that, after its deduction and the allowance of another credit, there was due appellant a balance of $14,192.25; and it refused to allow appellant anything for profits which appellant would have realized if the contract had been performed. Judgment was rendered accordingly. 60 C. Cls. 201. The appeal to this court was taken under the law as it stood prior to the Act of’February 13, 1925, c. 229, 43 Stat. 936.
Appellant contends that changes made by the Government in the specifications, etc., occasioned such delay as to preclude full operations under its contract prior to the termination thereof, and that it.should have judgment for the profits which it would otherwise have made. The conclusive answer to this contention is two-fold: (!) The contract itself specified the remedies, to which appellant would be entitled in the event of changes in or a complete or partial termination of the contract, among which prospective profits were not included; and (2). appellant by the terms of the supplemental contract expressly released all claims to such profits.
Judgment affirmed.
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Christian v. The United States, 312 F.2d 418 (Ct. Cl. 1963)…so, there is no breach and normally there can be no recovery for the profits that would have been made if the Government had not exercised its reserved right. Davis Sewing Machine Co. of Delaware v. United States, 60 Ct.Cl. 201, 217 (1925), affirmed 273 U.S. 324, 47 S.Ct. 352, 71 L.Ed. 662 (1927); College Point [*424] Boat Corp. v. United States, 267 U.S. 12, 45 S.Ct. 199, 69 L.Ed. 490 (1925); De Laval Steam Turbine Co. v. United States, 284 U.S. 61, 73, 52 S.Ct. 78, 76 L.Ed. 168 (1931). In the present cas…
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John Reiner & Co. v. The United States, 325 F.2d 438 (Ct. Cl. 1963)…restricted, as plaintiff contends, to a decrease in the need for the item purchased. Under such an all-inclusive clause, the Government has the right to terminate “at will” (Davis Sewing Mach. Co. v. United States, 60 Ct.Cl. 201, 217 (1925), aff’d, 273 U.S. 324, 47 S.Ct. 352, 71 L.Ed. 662 (1927); Librach v. United States, 147 Ct.Cl. 605, 611 (1959)), and in the absence of bad faith or clear abuse of discretion the contracting officer’s election to terminate is conclusive. See Line Constr. Co. v. United Sta…
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Torncello v. The United States, 681 F.2d 756 (Ct. Cl. 1982)…ships or material.” 40 Stat. 182. In such case, the government was to make “just compensation therefor.” 40 Stat. 183. The example of a specially drafted contract clause is from Davis Sewing Machine Co. v. United States, 60 Ct.Cl. 201 (1925), aff’d, 273 U.S. 324, 47 S.Ct. 352, 71 L.Ed. 662 (1927). Davis Sewing Machine involved a contract for the procurement of Very pistols, which provided: Termination — This contract being necessitated by a state of war now existing, it is desirable and expedient that prov…