Request for Reformation of Timber Sale Contract

B-198515: Jun 23, 1981

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A lumber company requested reformation of a timber sale contract entitled the Ball Branch sale, or reformation or rescission of a modification to that contract dated October 22, 1974, to permit the cancellation of its obligation to cut and remove pulp wood. The company requested authority from the Forest Service to cut and remove pulp logs for each of three contracts. Pulp logs were not included in the clause of the contracts under which the company made its request. However, removal of pulp wood was permitted in a clause of one of the other contracts, so the Forest Service and the company executed a written agreement adding the removal of pulp wood to the contract as an addendum. Subsequently, the company requested that the agreement be canceled because of a deteriorating pulp market. The Forest Service denied the request and stated that the agreement was controlling. Upon appeal of that decision to the Board of Contract Appeals, the company requested that the contract be voided on the ground of mutual mistake. The Board denied jurisdiction over that issue. The company then requested that GAO reform the Ball Branch sale contract by deleting the agreement since it was included as a result of a mutual mistake. In addition, the company requested the reformation or rescission of the October 22 modification to the sales contract. GAO held that the timber sale contract could not be reformed on the basis of a mutual mistake because there was no showing that the written contract did not represent the full agreement of both parties. Further, GAO would not reform or rescind the agreement executed under the timber sale contract. Here the parties improperly interpreted the terms of the sale contract when executing the agreement. A mistake of law in interpreting the terms of a contract, in the absence of Government misrepresentation, does not provide a basis for relief. Accordingly, the request was denied.