B-152207, DEC. 2, 1963

B-152207, DEC. 2, 1963

TO TARASHINSKY MERCHANDISE COMPANY:

YOUR LETTER DATED JULY 22, 1963, IN EFFECT REQUESTS REVIEW OF SETTLEMENT DATED JULY 12, 1963, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $76.68 OF YOUR BID DEPOSIT WHICH WAS WITHHELD AS LIQUIDATED DAMAGES ASSESSED FOR YOUR FAILURE TO REMOVE CERTAIN SURPLUS PROPERTY SOLD TO YOU UNDER ITEM 21 ON CONTRACT NO. DSA 39-S-529, DATED MARCH 25, 1963.

BY INVITATION NO. 39-S-63-38, DATED FEBRUARY 26, 1963, THE DEFENSE SUPPLY AGENCY, DEFENSE SURPLUS SALES OFFICE, FORT LEAVENWORTH, KANSAS, SOLICITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF CERTAIN SCRAP MATERIAL. YOU WERE THE SUCCESSFUL BIDDER ON ITEM 21, WOOL. ESTIMATED WEIGHT 6,000 LBS. AT .0639 CENTS, LOCATED AT FORT RILEY, KANSAS, AND ITEM 73, WOOL, OD. ESTIMATED WEIGHT 1,000 LBS. AT .1119 CENTS, LOCATED AT FORT LEAVENWORTH, KANSAS. THE GOODS DESCRIBED AS ITEM 73 WERE SHIPPED TO YOU. HOWEVER, YOU ASKED FOR RELIEF ON ITEM 21 FOR THE REASON THAT THE INVITATION FOR BID MADE NO MENTION OF THIS MERCHANDISE BEING MUTILATED OR SHREDDED AND THEREFORE UNSALABLE. RELIEF WAS REFUSED AND WHEN YOU FAILED TO REMOVE THE PROPERTY, THE CONTRACT WAS TERMINATED AND $76.68, 20 PERCENT OF THE PURCHASE PRICE, WAS WITHHELD AS LIQUIDATED DAMAGES AND THE REMAINDER OF THE BID DEPOSIT, AFTER DEDUCTING THE SALE PRICE ON ITEM 73, WAS RETURNED TO YOU. YOU ASK REFUND OF THE AMOUNT OF $76.68 WITHHELD ON THE GROUND THAT YOU WERE MISLED BY THE DESCRIPTION OF THE MERCHANDISE WHICH WAS SHOWN IN THE CATALOG ACCOMPANYING THE INVITATION AS ,WOOL. JACKETS, SHIRTS, TROUSERS, ETC. BALED FOR SHIPMENT. ESTIMATED WEIGHT--- 6,000 LBS.' YOU ALSO CONTEND IN YOUR LETTER OF JULY 22, 1963, THAT YOUR REPRESENTATIVE INSPECTED THE MATERIAL AND WAS SHOWN MERCHANDISE THAT WAS NOT MUTILATED IN ANY WAY. AN INSPECTION REQUESTED BY THE SALES CONTRACTING OFFICER AFTER YOUR REFUSAL TO ACCEPT THE GOODS REVEALED THAT THE PROPERTY LISTED UNDER ITEM 21 WAS FROM JACKETS AND SHIRTS CUT THROUGH THE MIDDLE AND TROUSERS WITH THE LEGS CUT OFF.

ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE SALE IS AS FOLLOWS:

"2. CONDITION AND LOCATION OF PROPERTY. UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, ALL PROPERTY LISTED THEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS.' IF IT IS PROVIDED THEREIN THAT THE GOVERNMENT SHALL LOAD, THEN "WHERE IS" MEANS F.O.B. CONVEYANCE AT THE POINT SPECIFIED IN THE INVITATION. THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION. HOWEVER, THE GOVERNMENT MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION OF ANY OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE. EXCEPT AS PROVIDED IN CONDITIONS NO. 8 AND 10, NO REQUEST FOR ADJUSTMENT IN PRICE OR FOR RESCISSION OF THE SALE WILL BE CONSIDERED. THIS IS NOT A SALE BY SAMPLE.'

THE SALE WAS ALSO SUBJECT TO THE FOLLOWING SPECIAL CONDITION:

"ARTICLE R--- SCRAP. THE BIDDER REPRESENTS AND WARRANTS TO THE UNITED STATES THAT THE PROPERTY COVERED BY THIS AGREEMENT WAS OFFERED AS SCRAP AND THAT HE WILL SELL AND SHIP OR USE IT ONLY AS SCRAP EITHER IN ITS EXISTING CONDITION OR AFTER FURTHER PREPARATION.'

IN ADDITION, BIDDERS WERE CAUTIONED TO INSPECT THE PROPERTY. THESE TERMS AND CONDITIONS WERE AGREED TO BY YOU UPON THE SUBMISSION OF YOUR BID AND WERE INCORPORATED IN, AND BECAME A PART OF, SALES CONTRACT NO. DSA 39-S- 529. THUS THE QUESTION TO BE CONSIDERED IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY.

THE COURTS MANY TIMES HAVE CONSIDERED SUCH CONTRACT STIPULATIONS IN CASES INVOLVING THE SALE OF GOVERNMENT-OWNED GOODS, AND HAVE HELD CONSISTENTLY THAT SUCH PROVISIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY. LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92; W. E. HEDGER CO., INC., V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISIONS BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT, ANY WARRANTIES WHATEVER. IN THE CASE OF OVERSEAS NAVIGATION CORPORATION V. UNITED STATES, 131 CT.CL. 70, THE COURT OF CLAIMS HELD THAT THE TERMS OF THE SALES CONTRACT UNDER CONSIDERATION, INCLUDING ITS "AS IS, WHERE IS" PROVISIONS, SPOKE FOR THEMSELVES AND THE PLAINTIFF WAS LEGALLY BOUND BY THEM.

THE EFFECT OF "THE BEST AVAILABLE INFORMATION" CLAUSE WAS CONSIDERED IN THE CASE OF WESTERN NON-FERROUS METALS CORP. V. UNITED STATES, 192 F.SUPP. 774. IN REGARD TO THE ABOVE CONTRACT CLAUSE THE COURT STATED AT PAGE 774, AS FOLLOWS:

"/1)THE CONTRACTUAL PROVISION UPON WHICH PLAINTIFF STAKES ITS CLAIM STATES THAT "THE DESCRIPTION IS BASED UPON THE BEST AVAILABLE INFORMATION.' WHEN READ IN THE CONTEXT OF THE UNEQUIVOCAL LANGUAGE IN WHICH IT IS SET, IT IS CLEAR THAT IT WOULD BE ERRONEOUS TO INTERPRET THE PROVISIONS AS OBLIGATING DEFENDANT TO MAKE ANY EFFORTS WHATEVER TO OBTAIN RELIABLE INFORMATION, OR TO INTERPRET IT AS A WARRANTY THAT THE INFORMATION SUPPLIED IS THE BEST INFORMATION THAT CAN BE OBTAINED. THE REASONABLE AND APPARENT INTERPRETATION IS THAT DEFENDANT REPRESENTS ONLY THAT IT POSSESSES NO INFORMATION BETTER THAN THAT WHICH IS OFFERED. GOOD FAITH IS ALL THAT IS REQUIRED. STANDARD MAGNESIUM CORPORATION V. UNITED STATES, 10 CIR., 1957, 241 F.2D 677. AND PLAINTIFF HAS EXPRESSLY DISCLAIMED ANY INTENTION OF IMPUTING BAD FAITH TO DEFENDANT. IN SUMMARY, THERE IS NOTHING IN THE LANGUAGE OF THIS CONTRACT TO DISTINGUISH ITS MEANING FROM THAT OF SIMILAR LANGUAGE WHICH HAS BEEN DESCRIBED AS APPLYING THE RULE OF CAVEAT EMPTOR TO THE FURTHEREST POSSIBLE LIMITS, AND UPON WHICH DEFENDANT HAS PREVAILED IN SITUATIONS SIMILAR TO THIS. * * *"

THERE IS NOTHING IN THE RECORD WHICH INDICATES BAD FAITH ON THE PART OF THE GOVERNMENT. THE ITEMS LISTED IN THE INVITATION WERE DESCRIBED AS WOOL SCRAP AND THE ADDITIONAL DESCRIPTION OF THE MATERIAL FURNISHED BASED ON THE "BEST AVAILABLE INFORMATION," AS STATED IN THE INVITATION, WAS MERELY TO SHOW THE SOURCE OF THE BASIC MATERIAL. UNDER THE CONDITIONS OF THE SALE, THE GOVERNMENT WAS ONLY OBLIGED TO ACT IN GOOD FAITH, AND THIS IT DID. SEE SACHS MERCANTILE CO. V. UNITED STATES, 78 CT.CL. 801; DADOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178.

ACCORDINGLY, WE FIND NO LEGAL BASIS ON WHICH TO ALLOW YOUR CLAIM AND THE SETTLEMENT OF JULY 12, 1963, IS SUSTAINED.