B-153335, FEB. 11, 1964

B-153335, FEB. 11, 1964

TO MR. THEODORE SALL:

YOUR LETTER OF JANUARY 14, 1964, HAS BEEN CONSIDERED AS A REQUEST FOR REVIEW OF OUR SETTLEMENT DATED JANUARY 10, 1964, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF THE PURCHASE PRICE PAID TO THE GOVERNMENT FOR CERTAIN SURPLUS PROPERTY, PLUS TRANSPORTATION CHARGES FOR THE REMOVAL AND RETURN OF THE PROPERTY TO THE GOVERNMENT.

YOU WERE AWARDED ITEM NO. 72, DESCRIBED AS 6,950 POUNDS OF SCRAP MONEL SOLIDS, UNDER INVITATION NO. 11-S-64-6, DATED JULY 17, 1963, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, UNITED STATES NAVAL BASE, PHILADELPHIA, PENNSYLVANIA, ON THE BASIS OF YOUR HIGH BID OF ?3169 PER POUND SUBMITTED AFTER YOUR AGENT HAD INSPECTED THE ITEM. THE INVITATION STATED THAT THE PROPERTY WAS OFFERED FOR SALE ON AN "AS IS" AND "WHERE IS" BASIS WITH NO WARRANTY OF ANY KIND BY THE GOVERNMENT, AND THAT THE DESCRIPTION OF THE PROPERTY WAS BASED ON THE BEST AVAILABLE INFORMATION.

AFTER YOU HAD ACCEPTED DELIVERY OF THE PROPERTY, YOU NOTIFIED THE PROPERTY DISPOSAL OFFICE THAT THE MATERIAL WAS NOT MONEL AS DESCRIBED BUT IRON TUBING WITH A MONEL SLEEVE, AND YOU RETURNED THE MATERIAL TO THE GOVERNMENT FOR CHECKING.

THE RECORDS BEFORE THIS OFFICE (INCLUDING A COPY OF THE LABORATORY REPORT) ESTABLISH THAT, PRIOR TO LISTING THE ITEM FOR SALE, THE HOLDING ACTIVITY HAD A LABORATORY ANALYSIS MADE OF A PIECE CUT FROM ONE END OF THE ITEM, WHICH SHOWED IT TO BE MONEL. IT IS REPORTED, ALSO THAT NONE OF THE FOUR KNOWN BIDDERS COMMENTED ON THE MISDESCRIPTION DURING THE INSPECTION PERIOD AND IT WAS NOT UNTIL AFTER THE AWARD AND DELIVERY TO YOUR THAT IT WAS DISCOVERED THAT THE ITEM WAS MONEL CLAD RATHER THAN SOLID MONEL. THE CIRCUMSTANCES WE FIND NO BASIS FOR ANY DOUBT THAT THE SALES DESCRIPTION WAS BASED ON THE BEST INFORMATION AVAILABLE TO THE SELLING AGENCY, OR THAT THERE WAS COMPLETE GOOD FAITH ON THE PART OF THE GOVERNMENT'S REPRESENTATIVES IN DESCRIBING THE PROPERTY TO BE SOLD.

WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION, NO SUCH WARRANTY MAY BE IMPLIED WHERE, AS HERE, THE SALES CONTRACT CONTAINS AN EXPRESS DISCLAIMER OF WARRANTY. MOREOVER, THE GOVERNMENT IN DISPOSING OF ITS SURPLUS PROPERTY IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS NOT AWARE OF THE TRUE DESCRIPTION OF THE GOODS IT SELLS. UNITED STATES V. KELLY, 112 F.SUPP. 831; I. SHAPIRO AND CO. V. UNITED STATES, 66 CT.CL. 424; AND MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67. THESE CASES AND OTHERS HOLD 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, THE PURPOSE AND EFFECT OF SUCH PROVISIONS BEING TO IMPOSE ALL RISKS OF MISTAKE UPON THE BUYER. ALSO, THE COURTS HAVE HELD THAT AN EXPRESS DISCLAIMER OF WARRANTY AS USED IN SURPLUS PROPERTY SALES BY THE GOVERNMENT PRECLUDES A SUIT FOR DAMAGES ON THE THEORY OF MUTUAL MISTAKE. UNITED STATES V. HATHAWAY, 242 F.2D 897; AND AMERICAN SANITARY RAG CO. V. UNITED STATES, 142 CT.CL. 293.

WHILE THE SALES DESCRIPTION APPEARS TO HAVE BEEN INACCURATE, IT WAS PREPARED IN GOOD FAITH FROM AVAILABLE DATA, AND THERE WAS IN THE CONDITIONS OF SALE AN EXPRESS DISCLAIMER OF WARRANTY THAT THE PROPERTY WAS AS DESCRIBED. THEREFORE, NO RELIEF MAY BE GRANTED BECAUSE OF THE VARIATION BETWEEN THE DESCRIPTION IN THE INVITATION AND THE PROPERTY ACTUALLY DELIVERED.

ACCORDINGLY, THE SETTLEMENT DISALLOWING YOUR CLAIM IS SUSTAINED.

IN REPLY TO YOUR CONCLUDING QUESTION YOU ARE ADVISED THAT THE DECISION OF THIS OFFICE IS CONCLUSIVE SO FAR AS THE EXECUTIVE BRANCH OF THE GOVERNMENT IS CONCERNED, BUT IS WITHOUT PREJUDICE TO ANY JUDICIAL REMEDY WHICH YOU MAY WISH TO SEEK.