B-134819, MAR. 21, 1958

B-134819: Mar 21, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED FEBRUARY 28. SIEGEL WAS AWARDED CONTRACT NO. THE PURCHASER STATED THAT WHEN HE MADE HIS BID HE BELIEVED THAT THE LIFE PRESERVERS WERE SUITABLE FOR USE. BECAUSE ON EACH ARTICLE THERE WAS A LABEL WHICH ALLEGEDLY STATED. "PRESERVERS HAVE BEEN GOVT. FROM THE SAME LOT THAT THE SALE WAS MADE TO MR. QUANTITIES OF LIFE PRESERVERS ALSO WERE SOLD TO OTHER PURCHASERS AT UNIT PRICES OF $1.178. THERE WAS NOTHING UNUSUAL ABOUT MR. THE GOVERNMENT HAD NO KNOWLEDGE OF THE PURPOSE OR USE TO WHICH THE LIFE PRESERVERS WERE TO BE PUT AND IT IS EVIDENT FROM THE TERMS OF THE SALE THAT THE GOVERNMENT DID NOT WARRANT THAT THE ARTICLES COULD BE USED FOR ANY PARTICULAR PURPOSE.

B-134819, MAR. 21, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED FEBRUARY 28, 1958, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), WHO REQUESTED A DECISION WHETHER A SALES CONTRACT WITH MR. J. M. SIEGEL, LOS ANGELES, CALIFORNIA, MAY BE RESCINDED.

ON OCTOBER 9, 1957, MR. J. M. SIEGEL WAS AWARDED CONTRACT NO. DA (S/ 04- 513 AVI-183, IN THE TOTAL AMOUNT OF $11,220.84, SELLING TO HIM 5,834 YOKE TYPE LIFE PRESERVERS, DESCRIBED AS "SCRAP MATERIAL AND SALVAGE PROPERTY," AT $1.0666 EACH AND 5,000 UNITS AT $0.99966 EACH. ON NOVEMBER 21, 1957, AT A CONFERENCE WITH THE CONTRACTING OFFICER AND THE ASSISTANT PROPERTY DISPOSAL OFFICER, AND IN SUBSEQUENT CORRESPONDENCE, THE PURCHASER REQUESTED REFUND OF HIS DEPOSIT OF $3,788, BECAUSE THE U.S. COAST GUARD WOULD NOT APPROVE THE USE OF THE LIFE PRESERVERS. THE PURCHASER STATED THAT WHEN HE MADE HIS BID HE BELIEVED THAT THE LIFE PRESERVERS WERE SUITABLE FOR USE, BECAUSE ON EACH ARTICLE THERE WAS A LABEL WHICH ALLEGEDLY STATED,"PRESERVERS HAVE BEEN GOVT. TESTED REPRESENTATIVELY AND APPROVED FOR SERVICE.'

FROM THE SAME LOT THAT THE SALE WAS MADE TO MR. SEIGEL AT UNIT PRICES OF $1,0666 AND $0.99966, QUANTITIES OF LIFE PRESERVERS ALSO WERE SOLD TO OTHER PURCHASERS AT UNIT PRICES OF $1.178, $1.033, $0.988 AND $0.933. THEREFORE, THERE WAS NOTHING UNUSUAL ABOUT MR. SIEGEL'S PURCHASE PRICE.

THE TERMS AND CONDITIONS OF THE SALE DISCLAIMED ANY WARRANTY OF "FITNESS FOR ANY USE OR URPOSE" AND CAUTIONED THAT NO CLAIM WOULD BE CONSIDERED "FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.' THE GOVERNMENT HAD NO KNOWLEDGE OF THE PURPOSE OR USE TO WHICH THE LIFE PRESERVERS WERE TO BE PUT AND IT IS EVIDENT FROM THE TERMS OF THE SALE THAT THE GOVERNMENT DID NOT WARRANT THAT THE ARTICLES COULD BE USED FOR ANY PARTICULAR PURPOSE. THE MATERIAL WAS SOLD IN GOOD FAITH FOR WHAT IT WAS BELIEVED TO BE--- SCRAP AND SALVAGE. BY SO DESCRIBING THE PROPERTY, THE GOVERNMENT INDICATED TO ALL PROSPECTIVE PURCHASERS THAT THE PROPERTY HAD NO REASONABLE PROSPECT OF FUTURE USE AND HAD NO VALUE EXCEPT FOR ITS BASIC MATERIAL CONTENT.

EVIDENTLY, THE PURCHASER NOW CHOOSES TO DISREGARD THE PLAIN TERMS OF THE SALE AND TO RELY ON THE STATEMENT ALLEGED TO HAVE BEEN ON THE LABEL ON EACH LIFE PRESERVER. IN 1 WILLISTON ON SALES 213, THE RULE IS STATED AS FOLLOWS:

"THE PARTIES MAY BY AGREEMENT LIMIT THE EFFECT OF LANGUAGE WHICH WOULD OTHERWISE BE CONSTRUED AS AMOUNTING TO AN EXPRESS WARRANTY. THE MOST COMMON ILLUSTRATION OF THIS IS WHERE THE SELLER MAKES STATEMENTS IN REGARD TO THE GOODS, BUT REFUSES TO WARRANT THE TRUTH OF THE STATEMENTS. THOUGH THE STATEMENTS BY THEMSELVES MIGHT BE SUFFICIENT TO CONSTITUTE A WARRANTY, THE REFUSAL NOT ONLY INDICATES AN UNWILLINGNESS TO CONTRACT FOR THE TRUTH OF THE STATEMENTS, BUT ALSO SHOULD PUT THE BUYER SO ON HIS GUARD THAT HE WOULD NOT BE JUSTIFIED IN BUYING IN RELIANCE UPON THEM.'

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR RELIEVING MR. SEIGEL OF HIS OBLIGATION UNDER THE TERMS OF THE CONTRACT.