A-89632, NOVEMBER 28, 1938, 18 COMP. GEN. 483

A-89632: Nov 28, 1938

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WITHIN THE TIME LIMIT OF THE CONTRACT IT BECAME NECESSARY FOR THE GOVERNMENT TO MAINTAIN AN OFFICE IN THE OLD QUARTERS AS WELL AS PAY PARTIAL RENT IN THE NEW QUARTERS FOR WHICH THE FURNITURE WAS BEING PROCURED. THE ADDITIONAL EXPENSES INCURRED BY THE GOVERNMENT ARE SUCH AS MIGHT REASONABLY BE EXPECTED TO FLOW FROM THE FAILURE TO MAKE TIMELY DELIVERY AND THEREFORE CHARGEABLE TO THE CONTRACTOR NOTWITHSTANDING THE ABSENCE IN THE CONTRACT OF A PROVISION FOR DAMAGES AND THE LACK OF DAMAGE LIQUIDATION IN ADVANCE. 1938: THERE IS BEFORE THIS OFFICE FOR CONSIDERATION YOUR REQUEST FOR REVIEW OF SO MUCH OF SETTLEMENT DATED SEPTEMBER 30. WAS FURNISHED YOU BUT INSTEAD OF SHIPMENT BEING MADE WITHIN THE STIPULATED TIME.

A-89632, NOVEMBER 28, 1938, 18 COMP. GEN. 483

CONTRACTS - DAMAGES - LACK OF PROVISION FOR - CONTRACTOR'S LIABILITY FOR ADDITIONAL EXPENSES REASONABLY FLOWING FROM CONTRACT BREACH WHERE BECAUSE OF THE FAILURE OF THE CONTRACTOR TO MAKE DELIVERY OF FURNITURE, ETC., WITHIN THE TIME LIMIT OF THE CONTRACT IT BECAME NECESSARY FOR THE GOVERNMENT TO MAINTAIN AN OFFICE IN THE OLD QUARTERS AS WELL AS PAY PARTIAL RENT IN THE NEW QUARTERS FOR WHICH THE FURNITURE WAS BEING PROCURED, THE ADDITIONAL EXPENSES INCURRED BY THE GOVERNMENT ARE SUCH AS MIGHT REASONABLY BE EXPECTED TO FLOW FROM THE FAILURE TO MAKE TIMELY DELIVERY AND THEREFORE CHARGEABLE TO THE CONTRACTOR NOTWITHSTANDING THE ABSENCE IN THE CONTRACT OF A PROVISION FOR DAMAGES AND THE LACK OF DAMAGE LIQUIDATION IN ADVANCE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE AMERICAN HARDWARE CO., NOVEMBER 28, 1938:

THERE IS BEFORE THIS OFFICE FOR CONSIDERATION YOUR REQUEST FOR REVIEW OF SO MUCH OF SETTLEMENT DATED SEPTEMBER 30, 1938, AS DISALLOWED $140 OF THE AMOUNT CLAIMED AS BALANCE DUE IN CONNECTION WITH THE FURNISHING BY THE CORBIN CABINET LOCK DIVISION OF YOUR COMPANY OF FURNITURE AND SCREEN LINE EQUIPMENT FOR THE POST OFFICE AT ST. JOHNSVILLE, N.Y.

IT APPEARS THAT BY CONTRACT DATED JUNE 30, 1936, YOU AGREED TO FURNISH THE EQUIPMENT FOR INSTALLATION IN THE NEW POST OFFICE QUARTERS WITHIN 30 DAYS AFTER RECEIPT OF ORDER. PURCHASE ORDER DATED JUNE 30, 1936, WAS FURNISHED YOU BUT INSTEAD OF SHIPMENT BEING MADE WITHIN THE STIPULATED TIME, IT WAS NOT MADE UNTIL OCTOBER 6, 1936; A DELAY OF APPROXIMATELY 2 MONTHS. AS A RESULT OF THIS DELAY IT WAS NECESSARY FOR THE GOVERNMENT TO MAINTAIN A POST OFFICE IN THE OLD QUARTERS DURING SEPTEMBER AND OCTOBER WHICH WOULD OTHERWISE HAVE BEEN UNNECESSARY (THE LEASE HAVING TERMINATED AUGUST 31, 1936); ALSO TO PAY PARTIAL RENT IN THE NEW POST OFFICE QUARTERS WHICH WERE BEING FURNISHED BY YOU. THE RENT OF THE OLD QUARTERS FOR THESE 2 MONTHS AMOUNT TO $210 AND FOR THE NEW QUARTERS $80 (TOTAL $290). IF THE NEW QUARTERS COULD HAVE BEEN FULLY OCCUPIED THE TOTAL RENTAL THEREFORE WOULD HAVE AMOUNTED TO $150-- $75 PER MONTH. THUS, AS A RESULT OF YOUR FAILURE TO FURNISH THE EQUIPMENT AS REQUIRED BY THE CONTRACT THE UNITED STATES WAS DAMAGED TO THE EXTENT OF $140 FOR ADDITIONAL RENT.

YOU STATE IN YOUR LETTER OF OCTOBER 27, 1938, THAT---

OUR CONTENTION IS THAT NO PENALTY WAS STIPULATED IN THE ORDER WE RECEIVED FROM THE POST OFFICE DEPARTMENT AND, THEREFORE, THE DEDUCTION IS UNWARRANTED.

THE FACT THAT ANY DAMAGES WHICH MIGHT FLOW FROM BREACH OF THE TIME REQUIREMENTS OF YOUR CONTRACT WERE NOT LIQUIDATED IN ADVANCE DOES NOT MEAN THAT THEY ARE NOT CHARGEABLE AGAINST YOUR ACCOUNT. AS STATED BY THE SUPREME COURT IN GLOBE REFINING CO. V. LANDA COTTON OIL CO., 190 U.S. 540, 543:

* * * IT IS TRUE THAT AS PEOPLE WHEN CONTRACTING CONTEMPLATE PERFORMANCE, NOT BREACH, THEY COMMONLY SAY LITTLE OR NOTHING AS TO WHAT SHALL HAPPEN IN THE LATTER EVENT, AND THE COMMON RULES HAVE BEEN WORKED OUT BY COMMON SENSE, WHICH HAS ESTABLISHED WHAT THE PARTIES PROBABLY WOULD HAVE SAID IF THEY HAD SPOKEN ABOUT THE MATTER. * * *

AND, FURTHER, IN THE SAME CASE THE COURT STATED "WHEN A MAN MAKES A CONTRACT HE INCURS BY FORCE OF THE LAW A LIABILITY TO DAMAGES, UNLESS A CERTAIN PROMISED EVENT COMES TO PASS"--- WHICH EVENT IN THE PRESENT CASE WAS THE DELIVERY OF THE MERCHANDISE COVERED BY THE CONTRACT WITHIN THE TIME SPECIFIED. IN CASES WHERE DAMAGES ARE FOR ASSESSMENT THE MEASURE OF THE DAMAGES IS THE LOSS SUSTAINED AS A RESULT OF THE CONTRACTUAL BREACH. UNITED STATES V. BEHAN, 110 U.S. 338. SEE ALSO WING AND BOSTWICK CO. V. UNITED STATES FIDELITY AND GUARANTY CO., 150 F. 672, 676-7; MASSACHUSETTS BONDING AND INSURANCE CO. V. JOHN R. THOMPSON CO., 88 F./2D) 825, 832.

THE ADDITIONAL EXPENSES WHICH WERE INCURRED BY THE GOVERNMENT IN THE PRESENT CASE AS A RESULT OF YOUR FAILURE TO MAKE TIMELY DELIVERY WERE SUCH AS MIGHT REASONABLY BE EXPECTED TO FLOW FROM SUCH A BREACH. IT MUST BE HELD, THEREFORE, THAT THE DEDUCTION OF $140 FROM AMOUNTS OTHERWISE DUE YOU WAS PROPER. THE DECISION IS ACCORDINGLY.