B-153018, JAN. 8, 1964

B-153018, JAN. 8, 1964

TO LURIA BROTHERS AND COMPANY, INC.:

FURTHER REFERENCE IS MADE TO A LETTER DATED NOVEMBER 21, 1963, AND ENCLOSURE, FROM WALTER FREEDMAN, ATTORNEY, REQUESTING ON YOUR BEHALF RECONSIDERATION OF OUR SETTLEMENT DATED OCTOBER 11, 1963, WHICH DISALLOWED YOUR CLAIM FOR $9,288.33 REPRESENTING A PART OF THE PRICE PAID BY YOU FOR ITEM 1 UNDER SURPLUS SALES CONTRACT NO. DSA 35-S-887 DATED APRIL 17, 1963.

IN RESPONSE TO INVITATION NO. 35-S-63-44 ISSUED BY THE PUEBLO DEFENSE SURPLUS SALES OFFICE, PUEBLO ARMY DEPOT, PUEBLO, COLORADO, YOU SUBMITTED A BID DATED APRIL 12, 1963, OFFERING TO PURCHASE ITEM 1 AT A PRICE OF $0.2333 (LATER INCREASED TO $0.23899) PER LB, DESCRIBED AS CONSISTING OF 450,000 POUNDS OF MISCELLANEOUS METALS WHICH INCLUDED AMONG OTHER THINGS 93 INCOMPLETE RECEIVER TRANSMITTER GROUP MISSILE TRACKING ANTENNAS. SUBSEQUENT TO DELIVERY YOU ALLEGED THAT 49 OF THE 93 ANTENNAS HAD RING ASSEMBLIES THAT WERE SILVER WASHED RATHER THAN GOLD PLATED AS DESCRIBED IN THE INVITATION TO BID. YOU SAID THAT YOUR MR. RICHARD ODLE INSPECTED THE ANTENNAS PRIOR TO THE SALE BUT IT WAS NOT POSSIBLE TO DETERMINE THE TYPE OF RING ASSEMBLY BECAUSE THEY WERE TOTALLY ENCLOSED AND COMPLETELY RECESSED WITHIN THE ANTENNA ITSELF. FOR THIS REASON, MR. FREEDMAN CONTENDS THAT THE RULINGS IN PAXTON MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, AND AMERICAN AUTO PARTS COMPANY, INC. V. UNITED STATES, CT.CL. NO. 120-57, DECIDED JUNE 7, 1963, ARE NOT APPLICABLE AND YOU ARE ENTITLED TO HAVE YOUR CLAIM APPROVED.

THE CONTRACT (STANDARD FORM 114, MARCH 1960 EDITION) CONTAINED THE USUAL GENERAL SALE TERMS AND CONDITIONS APPLICABLE TO THE SALE OF GOVERNMENT SURPLUS PROPERTY, WHICH CONDITIONS YOU AGREED TO WHEN YOU SUBMITTED YOUR BID PURSUANT TO BID INVITATION 35-S-63-44. UNDER CONDITIONS NO. 1, INSPECTION, AND NO. 2, CONDITION AND LOCATION OF PROPERTY, ALL PROSPECTIVE BIDDERS WERE PUT ON NOTICE AND URGED TO INSPECT THE PROPERTY BEING OFFERED FOR SALE PRIOR TO SUBMITTING ABID AS THE PROPERTY WAS BEING SOLD "AS IS" AND "WHERE IS" WITHOUT WARRANTY OR GUARANTY--- EXPRESS OR IMPLIED--- AS TO ITS CONDITION, INCLUDING THE DESCRIPTION OF THE PROPERTY, ITS FITNESS FOR ANY USE OR PURPOSE, AND EXCEPT FOR ADJUSTMENTS FOR VARIATION IN QUANTITY, WEIGHT, AND CERTAIN LOSSES, NO REQUEST FOR ADJUSTMENT IN PRICE OR FOR RESCISSION OF THE SALE WILL BE CONSIDERED. THIS WAS NOT A SALE BY SAMPLE.

THE COURTS MANY TIMES HAVE CONSIDERED SUCH CONTRACT STIPULATIONS IN CASES INVOLVING THE SALE OF GOVERNMENT-OWNED SURPLUS AND SCRAP GOODS AND HAVE HELD CONSISTENTLY THAT SUCH LANGUAGE CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY. SEE LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92; M. SAMUEL AND SONS V. UNITED STATES, 61 CT.CL. 373, 381; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; S. BRODY V. UNITED STATES, 64 CT.CL. 538; I. SHAPIRO AND CO. V. UNITED STATES, 66 CT.CL. 424, 428; AND SILBERSTEIN AND SON V. UNITED STATES, 69 CT.CL. 412. WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION--- AND THIS APPEARS TO BE THE BASIS OF YOUR CLAIM--- NO SUCH WARRANTY, HOWEVER, MAY BE IMPLIED WHERE, AS HERE, THE SALES CONTRACT CONTAINS AN EXPRESS DISCLAIMER. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; UNITED STATES V. KELLY, 112 F.SUPP. 831; AND MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISIONS, IN THE ABSENCE OF BAD FAITH OR FRAUD, BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER.

REGARDING THE ALLEGATION THAT IT WAS NOT POSSIBLE TO DETERMINE THE TYPE OF RING ASSEMBLY UPON INSPECTION, EITHER VISUALLY OR THROUGH CHEMICAL OR TECHNOLOGICAL PROCESSES, SEE THE RECENT CASE OF ALLOYS AND CHEMICALS CORP. V. UNITED STATES, CT.CL. NO. 8-62, DECIDED NOVEMBER 15, 1963, WHERE IN THE COURT OF CLAIMS HELD THAT THE ABOVE-MENTIONED CONSEQUENCES OF AN "AS IS" SALE MAY NOT BE AVOIDED EVEN IN CIRCUMSTANCES WHERE "INSPECTION PRIOR TO CONCLUSION OF THE CONTRACT WAS AN ABSOLUTE PHYSICAL IMPOSSIBILITY.'

WE THEREFORE CONCLUDE THAT NO LEGAL BASIS EXISTS FOR GRANTING ANY RELIEF AS TO THE MATERIAL IN ITEM 1 ON SALES CONTRACT DSA 35-S-887. ACCORDINGLY, THE SETTLEMENT OF OCTOBER 11, 1963, IS SUSTAINED.