B-134310, JAN. 23, 1958

B-134310, JAN. 23, 1958

TO L. BLOOM AND SON:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 12, 1957, WRITTEN IN YOUR BEHALF BY MILTON A. OMAN, ATTORNEY, REQUESTING FURTHER CONSIDERATION OF OUR DECISION DATED DECEMBER 4, 1957, WHICH SUSTAINED THE SETTLEMENT DISALLOWING YOUR CLAIM FOR $13,766.48, REPRESENTING THE PURCHASE PRICE (LESS THE PRO-RATA COST FOR TWO REELS) PAID FOR A QUANTITY OF ELECTRICAL CABLE UNDER CONTRACT NO. N665S-33359, WITH THE UNITED STATES NAVAL SUPPLY DEPOT, CLEAR FIELD, OGDEN, UTAH.

IT IS CONTENDED THAT THE SAMPLES OF THE CABLE MADE AVAILABLE TO BIDDERS CONTAINED A COPPER SHIELD AND THAT MANY OF THE SPOOLS EXAMINED BY YOU SINCE THE ACCEPTANCE OF YOUR BID DID NOT CONTAIN THE COPPER SHIELD.

IT IS ADMINISTRATIVELY STATED THAT THE ACTUAL PROPERTY DISPLAYED FOR SALE WAS THE PROPERTY PARTIALLY DELIVERED AND IS THE PROPERTY AVAILABLE FOR DELIVERY ON THE UNDELIVERED PORTION. ASSUMING THAT THE SPOOL OF CABLE SHOWN YOU DID CONTAIN A COPPER SHIELD, THE TRANSACTION CANNOT BE REGARDED AS A SALE BY SAMPLE IN THE LEGAL SENSE SUCH AS WOULD CARRY WITH IT AN IMPLIED WARRANTY AS TO QUALITY AND KIND AND AS WOULD REMOVE THE SALE FROM THE OPERATION OF THE RULE CAVEAT EMPTOR. IN TIFFANY ON SALES, SECOND EDITION, PAGE 263, THE RULE WITH RESPECT TO SUCH TRANSACTIONS IS ANNOUNCED AS FOLLOWS:

"IT IS NOT TO BE ASSUMED THAT EVERY SALE WHERE A SAMPLE IS SHOWN IS A SALE BY SAMPLE; FOR THE SELLER MAY SHOW A SAMPLE AND REFUSE TO SELL BY IT, REQUIRING THE BUYER TO INSPECT THE BULK AND TO FORM HIS OWN JUDGMENT, OR THE BUYER MAY DECLINE TO RELY ON THE SAMPLE AND REQUIRE AN EXPRESS WARRANTY. IT MUST APPEAR THAT IT WAS A TERM OF THE CONTRACT, EXPRESS OR IMPLIED, THAT THE SALE WAS BY SAMPLE.'

TO CONSTITUTE A SALE BY SAMPLE IN THE LEGAL SENSE OF THAT TERM IT MUST APPEAR THAT THE PARTIES CONTACTED SOLELY IN REFERENCE TO THE SAMPLE OR ARTICLE EXHIBITED AND THAT BOTH MUTUALLY UNDERSTOOD THAT THEY WERE DEALING WITH THE SAMPLE WITH AN UNDERSTANDING THAT THE BULK WAS TO BE LIKE IT. WOOD V. MICHAUD, 63 MINN. 478. IN WILLISON ON CONTRACTS,REVISED EDITION, SECTION 1004, THE PRINCIPLE IS STATED AS FOLLOWS:

"IT MUST NOT BE ASSUMED THAT IN EVERY CASE WHERE A SAMPLE IS SHOWN A WARRANTY OF THIS SORT ARISES. THUS THE SELLER MAY TAKE A SAMPLE OF THE GOODS, BEING HIMSELF IGNORANT AS TO THEIR QUALITY, AND MAY REPRESENT TO THE BUYER MERELY THAT THE SAMPLE WHICH HE EXHIBITED WAS FAIRLY TAKEN FROM THE BULK. IF THIS REPRESENTATION IS TRUE AND THE SELLER NEITHER REPRESENTS NOR PROMISES THAT THE GOODS SHALL BE EQUAL TO THE SAMPLE, HE WOULD NOT BE LIABLE IF THE BULK PROVED, IN PARTS, NOT TO BE EQUAL TO THE SAMPLE. WHETHER A SELLER WHO EXHIBITS A SAMPLE DOES REPRESENT THAT THE BULK IS LIKE THE SAMPLE, OR MERELY THAT THE SAMPLE WAS HONESTLY AND PROPERLY TAKEN, AND THAT THE BUYER MUST TAKE HIS OWN RISK AS TO THE BULK, IS A QUESTION OF FACT IN EACH CASE.'

THE EVIDENCE OF RECORD DOES NOT INDICATE THAT ANY AUTHORIZED AGENT OR REPRESENTATIVE OF THE GOVERNMENT WARRANTED OR REPRESENTED TO YOU THAT THE BULK OF THE GOODS SOLD WAS IDENTICAL WITH THE SAMPLES SEEN AND EXAMINED BY YOU. FURTHERMORE, EVEN IF REPRESENTATIONS TO THAT EFFECT WERE MADE BY AN AGENT OF THE GOVERNMENT YOU WOULD NOT BE JUSTIFIED IN RELYING ON THEM. PARAGRAPH 12 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS SPECIFICALLY WARNED ALL PROSPECTIVE BIDDERS THAT "ANY ORAL STATEMENT BY ANY REPRESENTATIVE OF THE GOVERNMENT, MODIFYING OR CHANGING ANY CONDITIONS OF THIS CONTRACT, IS AN EXPRESSION OF OPINION ONLY AND CONFERS NO RIGHT UPON THE PURCHASER.'

APART FROM THE FOREGOING, IT IS A FUNDAMENTAL PRINCIPLE OF THE LAW OF CONTRACTS THAT WHERE A CONTRACT IS REDUCED TO WRITING, EVERYTHING THAT THE WRITING DOES NOT CONTAIN IS PRESUMABLY EXCLUDED FROM THE CONTRACT AND EVIDENCE IS NOT ADMISSIBLE TO SHOW THAT THE VENDOR WARRANTED THE GOODS ORALLY DURING THE PREVIOUS NEGOTIATIONS, OR WHEN THE INSTRUMENT WAS EXECUTED; OR EVEN THAT THE SALE WAS BY SAMPLE AND THE BULK DOES NOT CORRESPOND THEREWITH. SEE BOUVIER'S LAW DICTIONARY, PAGE 3432, QUOTING FROM HARE ON CONTRACTS 532; 1 WILLISTON ON SALES 215, 46 AM.JUR. 465; ID. 554; 55 C.J. 710; KIMBALL-CLARK COMPANY V. CROSBY, 185 N.W. 172; PLANO MANUFACTURING COMPANY V. ROOT, 54 N.W. 924; HAMILTON IRON AND STEEL CO. V. GROVELAND MINING COMPANY, 233 F. 388; IMPERIAL PORTRAIT COMPANY V. BRYAN, 36 S.E. 291; WIENER V. WHIPPLE, 10 N.W. 433. IN THE CASE OF IMPERIAL PORTRAIT COMPANY V. BRYAN, THE COURT STATED:

"* * * IF THE CONTRACT HAS BEEN COMMITTED TO WRITING, AND NO REFERENCE IS MADE TO A SAMPLE, IT IS CLEAR THAT CONFORMITY OF THE BULK TO THE SAMPLE IS NOT AN AGREED TERM. * * *"

IN THE PRESENT CASE NEITHER THE INVITATION FOR BIDS PURSUANT TO WHICH THE CONTRACT WAS MADE NOR THE RESULTING CONTRACT CONTAINED ANY WARRANTY AS TO THE KIND OF CABLE OR ANY REFERENCE WHATEVER TO A SAMPLE. ON THE CONTRARY, THE CONTRACT EXPRESSLY PROVIDED IN ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS THAT NO WARRANTY, EXPRESS OR IMPLIED, WAS MADE BY THE GOVERNMENT AND THAT ,THIS IS NOT A SALE BY SAMPLE.' SINCE IT IS WELL SETTLED THAT AN EXPRESS DISCLAIMER OF WARRANTY, SUCH AS IS CONTAINED IN THE INSTANT CONTRACT, VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION, THERE OBVIOUSLY EXISTS NO BASIS FOR HOLDING THAT THIS WAS A SALE BY SAMPLE, OR THAT THERE WAS AN IMPLIED WARRANTY THAT THE CABLE WOULD CONFORM TO THE CABLE INSPECTED BY YOU. CF. AMERICAN ELASTICS, INC. V. UNITED STATES, 187 F.2D 109. CF. AMERICAN ELASTICS, INC. V. UNITED STATES, 187 F.2D 109. IT NECESSARILY FOLLOWS THAT THE ACCEPTANCE OF YOUR BID IN THE CIRCUMSTANCES RESULTED IN A BIDING OBLIGATION ON YOUR PART TO ACCEPT THE KIND OF CABLE DELIVERED AND VESTED IN THE GOVERNMENT THE RIGHT TO RECEIVE PAYMENT THEREFOR AT THE FULL CONTRACT PRICE.

IN CONNECTION WITH THE OFFER IN COMPROMISE, IT MAY BE STATED THAT THE RIGHT TO HAVE PERFORMANCE IN STRICT ACCORDANCE WITH THE TERMS OF THE CONTRACT FOR THE PRICES QUOTED IN YOUR BID WHICH VESTED IN THE GOVERNMENT CANNOT BE GIVEN AWAY OR SURRENDERED BY ANY OFFICER OF THE GOVERNMENT. SEE UNITED STATES V. AMERICAN SALES COMPANY, 27 F.2D 389, AFFIRMED 32 F.2D 141 AND CERTIORARI DENIED 280 U.S. 574; PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 49 C.CLS. 327, 335; AND BAUSCH AND LOMB OPTICAL COMPANY V. UNITED STATES, 78 C.CLS. 584, CERTIORARI DENIED 292 U.S. 645.

ACCORDINGLY, THE ACTION PREVIOUSLY TAKEN IN THE MATTER IN DENYING YOUR CLAIM IS AFFIRMED.