B-134599, DEC. 17, 1957

B-134599: Dec 17, 1957

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TO THE SECRETARY OF COMMERCE: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 6. THE RENTAL TERMS SPECIFIED THEREIN WERE AS FOLLOWS: TABLE ITEM NO. SINCE HE CLAIMS THAT THE RENTAL TERMS OF THE CONTRACT ARE AMBIGUOUS. HE APPEARS TO CONTEND THAT THERE WAS A MISTAKE IN EXPRESSING THE TRUE INTENTION OF THE PARTIES SUCH AS WOULD PREVENT THE FORMATION OF A VALID AND BINDING CONTRACT. THE CONTRACTOR IS TO BE PAID ?09 FOR EACH MILE THE VEHICLE IS DRIVEN WITHIN A SINGLE 24-HOUR PERIOD. THEN THE CONTRACTOR IS TO RECEIVE THE MINIMUM 24 HOUR RENTAL CHARGE OF $5.00. SUCH INTENTION WAS NOT DISCLOSED IN HIS PROPOSAL UPON WHICH THE INSTANT CONTRACT PRESUMABLY WAS BASED. THE RENTAL TERMS OF THIS CONTRACT ARE CLEAR AND UNAMBIGUOUS.

B-134599, DEC. 17, 1957

TO THE SECRETARY OF COMMERCE:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 6, 1957, WITH ENCLOSURES, REQUESTING AN INTERPRETATION OF CAR-RENTAL CONTRACT NO. C6CA-380A, DATED JUNE 19, 1957, AWARDED BY THE CIVIL AERONAUTICS ADMINISTRATION IN HAWAII TO DUARTE'S U-DRIVE AND TOURS, KALAHEO, KAUAI.

THE CONTRACT COVERS THE RENTAL OF PASSENGER VEHICLES TO GOVERNMENT PERSONNEL IN THE VICINITY OF LIHUE, KAUAI, THROUGHOUT THE PERIOD JULY 1 THROUGH DECEMBER 31, 1957. THE RENTAL TERMS SPECIFIED THEREIN WERE AS FOLLOWS:

TABLE

ITEM NO. SUPPLIES OR SERVICES AMOUNT

1 A. RATE PER MILE $ .09

B. MINIMUM CHARGE PER DAY (24 HRS. FROM

TIME VEHICLE SIGNED FOR BY GOVERNMENT

EMPLOYEE) 5.00

UNDER THE CONTRACTOR'S INTERPRETATION OF THE SPECIFIED RENTAL TERMS, THE GOVERNMENT WOULD BE OBLIGATED TO PAY A DAILY MINIMUM RENTAL OF $5.00 ON EACH CAR HIRED AND, IN ADDITION THERETO, A STRAIGHT ?09 PER MILE CHARGE IRRESPECTIVE OF THE MILEAGE ACTUALLY INCURRED. IN OTHER WORDS, THE CONTRACTOR APPARENTLY OBJECTS TO WHAT HE TERMS "FREE" MILEAGE UNDER ANY AND ALL CIRCUMSTANCES. SINCE HE CLAIMS THAT THE RENTAL TERMS OF THE CONTRACT ARE AMBIGUOUS, HE APPEARS TO CONTEND THAT THERE WAS A MISTAKE IN EXPRESSING THE TRUE INTENTION OF THE PARTIES SUCH AS WOULD PREVENT THE FORMATION OF A VALID AND BINDING CONTRACT.

ACCORDING TO THE GOVERNMENT'S INTERPRETATION OF THE SPECIFIED RENTAL TERMS, THE CONTRACTOR IS TO BE PAID ?09 FOR EACH MILE THE VEHICLE IS DRIVEN WITHIN A SINGLE 24-HOUR PERIOD, AND IN THE EVENT THE NUMBER OF MILES TRAVELED, WHEN MULTIPLIED BY THE SPECIFIED MILEAGE RATE, AMOUNTS TO LESS THAN $5.00, THEN THE CONTRACTOR IS TO RECEIVE THE MINIMUM 24 HOUR RENTAL CHARGE OF $5.00, IN LIEU OF THE FLAT MILEAGE RATE.

HAD THE CONTRACTOR INTENDED TO CHARGE A FLAT RENTAL OF $5 PER DAY, PLUS AN ACTUAL MILEAGE CHARGE OF ?09 PER MILE TRAVELED, SUCH INTENTION WAS NOT DISCLOSED IN HIS PROPOSAL UPON WHICH THE INSTANT CONTRACT PRESUMABLY WAS BASED. IN FACT, THE RENTAL TERMS OF THIS CONTRACT ARE CLEAR AND UNAMBIGUOUS, AND NOT SUBJECT TO AN INTERPRETATION DIFFERENT FROM THAT PLACED THEREON BY THE PROCUREMENT AGENCY, AS DISCLOSED IN ITS COMMUNICATION OF AUGUST 13, 1957, TO THE CONTRACTOR.

THE WORD "MINIMUM," INSOFAR AS IT RELATES TO CHARGES OR PAYMENTS DUE UNDER A CONTRACT, OR OTHER AGREEMENT, HAS BEEN DEFINED JUDICIALLY TO MEAN THE SMALLEST POSSIBLE AMOUNT THAT CAN BE ASSIGNED IN A GIVEN CASE OR SITUATION. SEE MENNEN COMPANY V. KRAUSS COMPANY, 37 F.SUPP. 161, 163. BY THE EXPLICIT TERMS OF THE PRESENT CONTRACT, THE MINIMUM RENTAL PAYABLE FOR THE USE OF A VEHICLE OVER A 24-HOUR PERIOD IS $5.00, AND THIS AMOUNT IS PAYABLE TO THE CONTRACTOR ONLY WHEN THE MILEAGE ACCRUED DURING THAT PERIOD, WHEN MULTIPLIED BY THE SPECIFIED ?09 PER MILE RATE, DOES NOT EQUAL THE SPECIFIED MINIMUM CHARGE.

ACCORDINGLY, YOU ARE ADVISED THAT THE CONTRACT, AS WRITTEN, IS VALID AND BINDING UPON THE ..END :