B-147577, DEC. 11, 1961

B-147577, DEC. 11, 1961

TO ALLOYS AND CHEMICALS CORPORATION:

WE HAVE YOUR LETTER OF NOVEMBER 29, 1961, SUBMITTING A CLAIM IN THE AMOUNT OF $12,014.09 ARISING OUT OF A CONTRACT FOR THE PURCHASE OF SCRAP METALS FROM E. I. DUPONT DE NEMOURS AND COMPANY, INC., BY ALLOYS AND CHEMICALS CORPORATION.

E. I. DUPONT DE NEMOURS AND COMPANY, AS PRIME CONTRACTOR OF THE ATOMIC ENERGY COMMISSION UNDER CONTRACT NO. AT (07-2/-1 ISSUED AN INVITATION FOR BIDS ON MARCH 27, 1961, ON SIX LOTS OF SURPLUS MATERIALS IDENTIFIED AS LOT NUMBERS B-112 THROUGH B-116. LOT NO. B-114 WAS DESCRIBED AS MADE UP OF AL SI INGOTS WEIGHING AN ESTIMATED 3,500,000 POUNDS. THE TOTAL QUANTITY OF THE LOT WAS AS STATED IN PARAGRAPH C OF THE SPECIAL CONDITIONS BURIED LOOSE IN SAND-CLAY SOIL AND, THEREFORE, NO VISUAL INSPECTION COULD BE MADE BY THE BIDDERS TO AFFIRM THE TOTAL QUANTITY.

ON MAY 24, 1961, A CONTRACT FOR LOT NO. B-114 WAS AWARDED TO ALLOYS AND CHEMICALS CORPORATION AT A PRICE OF 10.198 CENTS PER POUND. HOWEVER, INSTEAD OF THE 3,500,000 POUNDS OF THE MATERIAL ONLY 1,934,467 POUNDS OR APPROXIMATELY 55 PERCENT, REPRESENTING ALL OF THE AVAILABLE MATERIAL CONFORMING TO THE DESCRIPTION OF THAT ITEM, WAS SHIPPED AND BILLED TO THE CONTRACTOR. THE SHORTAGE APPEARS TO HAVE RESULTED FROM AN INACCURATE ESTIMATE OF THE AMOUNT OF SUCH MATERIAL GENERATED.

YOUR CLAIM REPRESENTS THE ANTICIPATED PROFITS ON THE SALE OF THE AMOUNT OF THE SHORTAGE UNDER EXISTING AGREEMENTS BETWEEN ALLOYS AND OTHER FIRMS. YOU POINT OUT, ALSO, THAT YOU MIGHT PROPERLY CLAIM ADDITIONAL DAMAGES BASED ON THE DIFFERENCE BETWEEN THE CONTRACT PRICES (INCLUDING THE CONTRACT TO PURCHASE AND CONTRACTS OF SALE) AND THE MARKET PRICE AMOUNTING TO MORE THAN $110,000.

IN YOUR LETTER OF NOVEMBER 29, 1961, YOU DISTINGUISH THE INSTANT SITUATION FROM OTHERS IN WHICH SIMILAR CLAIMS HAVE BEEN DENIED ON THE BASIS THAT HERE THERE WAS NO OPPORTUNITY FOR THE BIDDER TO MAKE ANY INSPECTION PERMITTING HIM TO DETERMINE THE QUANTITY OF THE MATERIAL INCLUDED IN THE LOT.

PARAGRAPH 4 (B) OF THE SALES TERMS AND CONDITIONS STATES:

"/B) THE QUANTITY OF THE ABOVE MATERIAL IS ESTIMATED ONLY AND DU PONT COMPANY DOES NOT GUARANTEE TO FURNISH ANY MAXIMUM OR MINIMUM QUANTITIES OF ANY OF THE ABOVE CLASSES OF MATERIALS.'

IN ADDITION, PARAGRAPH E OF THE SPECIAL CONDITIONS PROVIDES IN PART:

"ALL PROPERTY OFFERED HEREUNDER IS SOLD "AS IS: " DU PONT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO THE KIND, SIZE, WEIGHT, QUALITY, CHARACTER, DESCRIPTION, OR CONDITION OF THE PROPERTY; OR ITS FITNESS FOR ANY USE OR PURPOSE. * * *"

AS NOTED ABOVE, THIS WAS A SALE BY THE POUND AND PAYMENT WAS REQUIRED ONLY ON THE BASIS OF THE WEIGHT ACTUALLY SHIPPED. THE PARTIES UNDER THE PROVISIONS QUOTED ABOVE SPECIFICALLY AGREED TO WAIVE WHATEVER WARRANTIES MAY OTHERWISE HAVE EXISTED WITH REFERENCE TO QUANTITY. IN THE SALE OF PERSONAL PROPERTY, PARTIES MAY, BY CONTRACT, ELIMINATE ANY RIGHTS OR LIABILITIES WHICH WOULD OTHERWISE ARISE BY IMPLICATION OF LAW SO LONG AS THE TERMS THEREOF ARE NOT IN CONTRAVENTION OF STATUTE OR PUBLIC POLICY. MYERS V. LAND, 235 S.W.2D 988. WHERE WARRANTIES HAVE BEEN WAIVED UNDER THE TERMS OF THE CONTRACT, THE VENDOR IS NOT LIABLE FOR ANY VARIATION IN THE ARTICLE FROM THE DESCRIPTION EVEN THOUGH SUCH VARIATION IS LATENT AND NOT SUBJECT TO DETERMINATION BY THE VENDEE--- AT LEAST IN THE ABSENCE OF FRAUD OR BAD FAITH. LUMBRAZO V. WOODRUFF, 175 N.E. 525.

SINCE THERE HAS BEEN NO SHOWING OR ALLEGATION OF FRAUD OR BAD FAITH, WE MUST CONCLUDE IN THE LIGHT OF THE FOREGOING THAT THERE EXISTS NO LEGAL BASIS FOR THE ALLOWANCE OF YOUR CLAIM.