A-64187, SEPTEMBER 30, 1935, 15 COMP. GEN. 253

A-64187: Sep 30, 1935

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THE RIGHT OF THE GOVERNMENT TO ASSERT A BREACH OF WARRANTY BY DEDUCTION FROM THE PURCHASE PRICE IS NOT WAIVED OR FORFEITED BY FAILURE TO GIVE THE CONTRACTOR NOTICE OF THE DEFECT IN QUALITY. NET WEIGHT ONLY AFTER DRESSING WILL BE ALLOWED AT POINT OF DELIVERY. INCLUDED ON THIS PROPOSAL SHALL BE SUBJECT IN EVERY WAY TO INSPECTION PRIOR TO DELIVERY OR UPON RECEIPT AT POINT OF DESTINATION AND THE RIGHT IS RESERVED FOR THE RECEIVING OFFICER TO REJECT ANY AND ALL SUPPLIES DELIVERED. IF IN HIS JUDGMENT THEY ARE IN ANY WAY UNSATISFACTORY. THE CONTRACTING OFFICER REPORTS THAT THE FISH SO DELIVERED WERE NOT PROPERLY TRIMMED AND DRESSED AS REQUIRED BY THE SPECIFICATIONS. AS A RESULT OF WHICH IT WAS NECESSARY TO REDRESS THE FISH AT THE FACILITY.

A-64187, SEPTEMBER 30, 1935, 15 COMP. GEN. 253

CONTRACTS - NONCOMPLIANCE WITH SPECIFICATIONS - BREACH OF WARRANTY IN THE EVENT SUPPLIES FURNISHED THE GOVERNMENT DO NOT COMPLY WITH THE SPECIFICATIONS OR FULFILL A WARRANTY AS TO QUALITY IN THE CONTRACT, THE RIGHT OF THE GOVERNMENT TO ASSERT A BREACH OF WARRANTY BY DEDUCTION FROM THE PURCHASE PRICE IS NOT WAIVED OR FORFEITED BY FAILURE TO GIVE THE CONTRACTOR NOTICE OF THE DEFECT IN QUALITY, THE CORRECTION OF WHICH BY THE GOVERNMENT CAUSED A REDUCTION IN QUANTITY, THE CONTRACT NOT SPECIFICALLY PROVIDING FOR SUCH NOTICE, NOR BY ACCEPTANCE OF DELIVERY OF THE QUANTITY SHOWN ON WAYBILLS WITHOUT PROTEST AND FAILURE TO REJECT THE SUPPLIES FOR NONCOMPLIANCE WITH SPECIFICATIONS.

COMPTROLLER GENERAL MCCARL TO THE SOUTHERN SEA FOOD CO., SEPTEMBER 30, 1935:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JUNE 15, 1935, REQUESTING A REVIEW OF SETTLEMENT NO. 0496491, DATED JUNE 14, 1935, WHICH DISALLOWED YOUR CLAIM FOR $12.42, REPRESENTING AN ADDITIONAL AMOUNT ALLEGED TO BE DUE FOR FURNISHING A CERTAIN QUANTITY OF CROAKERS TO THE VETERANS' ADMINISTRATION FACILITY, COATESVILLE, PA., UNDER INFORMAL CONTRACT NO. VA- 111H-554, DATED APRIL 23, 1934.

BY THE TERMS OF THE AFOREMENTIONED CONTRACT YOU AGREED TO FURNISH THE SAID ADMINISTRATION WITH SUCH QUANTITY OF CROAKERS, AT $0.069 PER POUND, AS MIGHT BE REQUESTED BY THE MANAGEMENT OF THE STATION FROM TIME TO TIME DURING THE MONTH OF MAY 1934, SUCH ORDERS TO BE 650 POUNDS EACH, MORE OR LESS, TO THE EXTENT OF 25 PERCENT.

THE CONTRACT FURTHER PROVIDED THAT:

ALL FISH DELIVERED UNDER THIS CONTRACT SHALL CONFORM TO AND MEET THE U.S. NAVY SPECIFICATIONS FOR QUALITY AS OUTLINED IN FEDERAL SPECIFICATION NO. PP-F-381 DATED 3-3-31. ALL FISH DELIVERED ,DRESSED" I.E. WITH HEADS, TAILS, AND ENTRAILS REMOVED, AND NET WEIGHT ONLY AFTER DRESSING WILL BE ALLOWED AT POINT OF DELIVERY.

ALL FISH, FRESH OR SALT, INCLUDED ON THIS PROPOSAL SHALL BE SUBJECT IN EVERY WAY TO INSPECTION PRIOR TO DELIVERY OR UPON RECEIPT AT POINT OF DESTINATION AND THE RIGHT IS RESERVED FOR THE RECEIVING OFFICER TO REJECT ANY AND ALL SUPPLIES DELIVERED, IF IN HIS JUDGMENT THEY ARE IN ANY WAY UNSATISFACTORY.

ACTING ON PURCHASE ORDER NO. 2317, DATED MAY 1, 1934, FOR APPROXIMATELY 580 POUNDS OF CROAKERS, YOU DELIVERED ON MAY 17, 1934, SIX BOXES CONTAINING FISH HAVING AN AGGREGATE GROSS WEIGHT OF 580 POUNDS, AND NET WEIGHT OF 560 POUNDS. THE CONTRACTING OFFICER REPORTS THAT THE FISH SO DELIVERED WERE NOT PROPERLY TRIMMED AND DRESSED AS REQUIRED BY THE SPECIFICATIONS, AS A RESULT OF WHICH IT WAS NECESSARY TO REDRESS THE FISH AT THE FACILITY. IN SO DOING, THE NET WEIGHT OF THE EDIBLE FISH WAS REDUCED TO 400 POUNDS. ACCORDINGLY, IN PAYMENT OF YOUR INVOICE PURPORTING TO COVER 580 POUNDS OF CROAKERS AT $0.069 PER POUND, THERE WAS DEDUCTED $12.42.

YOU URGED THAT THIS AMOUNT SHOULD BE PAID FOR THE REASONS THAT (1) NO NOTICE THAT THE FISH DID NOT MEET THE SPECIFICATIONS, OR THAT ANY DEDUCTION WAS TO BE MADE IN PAYMENT THEREFOR, WAS GIVEN YOU UNTIL AFTER THE END OF JUNE 1934; (2) THAT THE SHIPMENT OF CROAKERS COMPLIED WITH THE HOSPITAL SPECIFICATIONS IN EVERY WAY; (3) BECAUSE THE RECEIVING CLERK SHOULD NOT HAVE SIGNED FOR 580 POUNDS IF HE RECEIVED ONLY 400; (4) BECAUSE THE CONTRACTING OFFICER SHOULD HAVE REJECTED THE ENTIRE ORDER AND PURCHASED IN OPEN MARKET IF THE FISH DID NOT MEET THE SPECIFICATIONS.

ANSWERING YOUR RESPECTIVE CONTENTIONS, IT MUST BE HELD THAT:

(1) IN THE EVENT OF A BREACH OF WARRANTY AS TO QUALITY, THE BUYER IS NOT OBLIGATED, UNLESS IT IS SO STIPULATED IN THE CONTRACT, TO GIVE THE SELLER NOTICE OF THE DEFECT IN ORDER TO AVAIL ITSELF OF A BREACH OF WARRANTY, EITHER IN AN ACTION FOR DAMAGES FOR SUCH BREACH, OR BY WAY OF OFFSET AGAINST THE PURCHASE PRICE. 55 CORPUS JURIS 806.

(2) ON DISPUTED QUESTIONS OF FACT BETWEEN THE CONTRACTOR AND THE ADMINISTRATIVE OFFICE OF THE GOVERNMENT, THE RULE OF THE ACCOUNTING OFFICERS IS TO ACCEPT THE STATEMENT OF FACT AS FOUND BY THE ADMINISTRATIVE OFFICERS. 3 COMP. GEN. 51.

(3) THE RECEIPT FOR 580 POUNDS WAS GIVEN TO THE EXPRESSMAN MAKING THE DELIVERY, NOT AS AN ACKNOWLEDGMENT OF ANY PARTICULAR WEIGHT, BUT RATHER AS AN ACKNOWLEDGMENT OF THE RECEIPT OF THE NUMBER OF BOXES AS SHOWN ON HIS WAYBILLS. THE NET WEIGHT OF THE FISH WAS NOT COMPUTED UNTIL AFTER THE DEPARTURE OF THE EXPRESSMAN. THE NET WEIGHT OF THE FISH, ACCORDING TO THE SCALES AT THE FACILITY, WHICH WERE PROPERLY SEALED BY THE COUNTY SEALER OF WEIGHTS AND MEASURES, WAS 560 POUNDS. OF THIS AMOUNT, 160 POUNDS CONSISTED OF FINS, SCALES, AND PARTS OF HEADS AND TAILS.

(4) WHILE REJECTION OF THE FISH FOR THE REASON THAT THEY DID NOT MEET THE SPECIFICATIONS WOULD HAVE BEEN AN APPROPRIATE REMEDY FOR THE GOVERNMENT, YET SUCH ACTION WAS NOT REQUIRED. THE RULE IS THAT A BUYER DOES NOT, BY MERE ACCEPTANCE AND RETENTION OF GOODS NOT FULFILLING A WARRANTY, WAIVE ITS RIGHT TO ASSERT A BREACH THEREOF. 55 CORPUS JURIS 799. WHERE THERE IS A BREACH OF WARRANTY BY THE SELLER, THE BUYER MAY, AT HIS ELECTION:

(A) ACCEPT OR KEEP THE GOODS AND SET UP AGAINST THE SELLER THE BREACH OF WARRANTY BY WAY OF RECOUPMENT IN DIMINUTION OR EXTINCTION OF THE PRICE.

(B) ACCEPT OR KEEP THE GOODS AND MAINTAIN AN ACTION AGAINST THE SELLER FOR DAMAGES FOR THE BREACH OF WARRANTY.

(C) REFUSE TO ACCEPT THE GOODS, IF THE PROPERTY THEREIN HAS NOT PASSED, AND MAINTAIN AN ACTION AGAINST THE SELLER FOR DAMAGES FOR THE BREACH OF WARRANTY.

(D) RESCIND THE CONTRACT TO SELL OR THE SALE AND REFUSE TO RECEIVE THE GOODS, OR, IF THE GOODS HAVE ALREADY BEEN RECEIVED, RETURN THEM OR OFFER TO RETURN THEM TO THE SELLER AND RECOVER THE PRICE OR ANY PART THEREOF WHICH HAS BEEN PAID.

ACCORDINGLY, THE FORMER SETTLEMENT DISALLOWING YOUR CLAIM FOR $12.42 MUST BE AND IS SUSTAINED.