B-126557, JAN. 25, 1956

B-126557: Jan 25, 1956

Additional Materials:

Contact:

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

 

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

TO KEYSTONE STORE FIXTURE COMPANY: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15. YOU CONTEND THAT UPON RECEIPT OF THE COLANDERS YOU FOUND THEY WERE MADE OF RETINNED STEEL INSTEAD OF ALUMINUM. YOU CONTEND THAT THE GOVERNMENT WAS GUILTY OF MISREPRESENTATION AND REQUEST THAT YOU BE PERMITTED TO RETURN THE MATERIAL AT GOVERNMENT EXPENSE OR BE REFUNDED HALF THE PURCHASE PRICE. YOU ARE ADVISED THAT YOUR CONTRACT DOES NOT CONTAIN SUCH A CLAUSE. PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS MADE A PART OF THE CONTRACT PROVIDED THAT THE PROPERTY WAS OFFERED FOR SALE "AS S" AND "WHERE IS" WITHOUT RECOURSE AGAINST THE GOVERNMENT AND THAT THE DESCRIPTION WAS BASED UPON THE BEST AVAILABLE INFORMATION.

B-126557, JAN. 25, 1956

TO KEYSTONE STORE FIXTURE COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15, 1955, AND ENCLOSURE, REQUESTING REVIEW OF SETTLEMENT DATED DECEMBER 14, 1955, WHICH DISALLOWED YOUR CLAIM FOR $72.40, ALLEGED TO BE DUE AS A PARTIAL REFUND OF THE AMOUNT PAID FOR COLANDERS PURCHASED FROM THE DEPARTMENT OF THE NAVY UNDER CONTRACT NO. N111S-63500.

THE INVITATION DESCRIBED THE COLANDERS AS ALUMINUM WITH LOOP HANDLES IN "UNUSED--- GOOD" CONDITION. YOU CONTEND THAT UPON RECEIPT OF THE COLANDERS YOU FOUND THEY WERE MADE OF RETINNED STEEL INSTEAD OF ALUMINUM. YOU CONTEND THAT THE GOVERNMENT WAS GUILTY OF MISREPRESENTATION AND REQUEST THAT YOU BE PERMITTED TO RETURN THE MATERIAL AT GOVERNMENT EXPENSE OR BE REFUNDED HALF THE PURCHASE PRICE.

WITH REGARD TO THE GUARANTEE CLAUSE FORWARDED WITH YOUR LETTER, YOU ARE ADVISED THAT YOUR CONTRACT DOES NOT CONTAIN SUCH A CLAUSE. TO THE CONTRARY, PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS MADE A PART OF THE CONTRACT PROVIDED THAT THE PROPERTY WAS OFFERED FOR SALE "AS S" AND "WHERE IS" WITHOUT RECOURSE AGAINST THE GOVERNMENT AND THAT THE DESCRIPTION WAS BASED UPON THE BEST AVAILABLE INFORMATION, BUT THE GOVERNMENT MADE NO GUARANTY, WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO THE CHARACTER OR QUALITY THEREOF, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND THAT NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT BASED UPON THE FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.

IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND BY OUR OFFICE THAT SUCH A PROVISION CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY AND NO WARRANTY MAY BE IMPLIED. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525 AND W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676. THOSE CASES, AND OTHERS TOO NUMEROUS TO MENTION, INVOLVING A VARIANCE IN THE CONDITION OF THE PROPERTY WITH THAT OF THE DESCRIPTION IN THE INVITATION, CONCLUDE THAT UNDER SUCH CIRCUMSTANCES BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT, ANY WARRANTIES WHATEVER. IN DISPOSING OF SURPLUS MATERIAL THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS UNAWARE OF THE QUALITY OR CONDITION OF THE GOODS IT SELLS. THAT FACT IS MADE KNOWN TO ALL BIDDERS BY THE "AS IS" TERMS OF THE CONTRACT WHEREBY THE PARTIES AGREE THAT THE RISK AS TO THE CONDITION OF THE MATERIAL SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN.

THE MATTER OF GRANTING RELIEF TO PURCHASERS OF SURPLUS PROPERTY UNDER TERMS AND CONDITIONS SIMILAR TO THOSE HERE PRESENT HAS BEEN THE SUBJECT OF NUMEROUS DECISIONS OF OUR OFFICE AND OF THE COURTS, AND IT HAS BEEN UNIFORMLY HELD THAT RECOVERY CANNOT BE HAD IN SUCH CASES. SEE SACHS MERCANTILE COMPANY, INC. V. UNITED STATES, 78 C.CLS. 801; S. BRODY V. UNITED STATES, 64 C.CLS. 538, AND PARTICULARLY LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90. WHILE THESE DECISIONS MAY APPEAR TO BE HARSH, THE GOVERNMENT HAS USED THE PLAINEST LANGUAGE POSSIBLE TO ADVISE PROSPECTIVE BIDDERS THAT IN SURPLUS SALES CONTRACTS SUCH AS HERE INVOLVED THE PRINCIPLE OF CAVEAT EMPTOR WILL APPLY RIGIDLY.