B-150092, NOV. 21, 1962

B-150092, NOV. 21, 1962

TO MORELAND TRADING CO. LTD.:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 4, 1962, REQUESTING REVIEW OF OUR CLAIMS DIVISION SETTLEMENT OF AUGUST 27, 1962, WHICH DISALLOWED YOUR CLAIM FOR L346.5.2 IN CONNECTION WITH AN AWARD TO YOUR FIRM OF ITEM 1 ON SPOT BID SALE NO. 61-730-S-62-8X.

A REVIEW OF THE RECORD BEFORE THIS OFFICE INDICATES THAT YOUR FIRM BID ON ITEM 1 IN THE ABOVE-MENTIONED SPOT BID SALE WHICH READS AS FOLLOWS:

"CANVAS SCRAP CONSISTING OF USED TARPAULINE, TENTAGE AND VEHICLE COVERS. US ORIGIN. ESTIMATED QTY--- 20,000 LBS. DUTY: 20 PERCENT PURCHASE TAX: NIL 1 LOT"

IT IS YOUR CONTENTION THAT THERE WAS A DISCREPANCY BETWEEN THE ESTIMATED WEIGHT OF 20,000 POUNDS, AND THAT YOU ACTUALLY RECEIVED ONLY 5 TONS 6 CWT. YOU ADMIT HAVING MADE AN INSPECTION OF THE GOODS PRIOR TO THE SALE, BUT ALLEGE THAT YOU RELIED ON THE ESTIMATED QUANTITY STATED IN THE CATALOGUE WITH REGARD TO THE WEIGHT OF THE LOT.

THE PRINCIPAL QUESTION IN CASES OF THIS KIND IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY THAT WAS SOLD. IN THIS REGARD, ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE SPOT BID SALE PROVIDES, IN PERTINENT PART, THAT:

"UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, ALL PROPERTY LISTED THEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS.' * * * THE GOVERNMENT MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION OF ANY OF THE PROPERTY * * *.'

IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH, SUCH AN EXPRESS DISCLAIMER OF WARRANTY, WHICH SPECIFICALLY REFERS TO WEIGHT, VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; AND I. SHAPIRO AND COMPANY V. UNITED STATES, 66 CT.CL. 424. THERE IS NOTHING IN THE RECORD BEFORE US TO ESTABLISH THE EXERCISE OF BAD FAITH BY THE PROPERTY DISPOSAL OFFICER IN CONNECTION WITH THE TRANSACTION. THE DESCRIPTIVE TERMS SET FORTH IN CONTRACTS OF SALE OF THIS KIND HAVE BEEN HELD TO BE NOTHING MORE THAN MERE EXPRESSIONS OF OPINION AS TO WHAT THE PROPERTY IS OR CONSISTS OF AND, THEREFORE, ANY DEVIATION FROM THE WEIGHT DESCRIPTION OF ITEM NO. 1 RESULTED FROM NOTHING MORE THAN AN ERROR NOT SHOWN TO HAVE BEEN OTHER THAN IN GOOD FAITH, WHICH IS COMPLETELY COVERED BY THE DISCLAIMER OF WARRANTY CLAUSE THAT SPECIFICALLY REFERRED TO WEIGHT. IT APPEARS THAT THE LOT WAS AVAILABLE FOR INSPECTION AND WAS IN FACT INSPECTED BY YOU, THAT THE ITEM WAS OFFERED AS ONE LOT AND BID ON BY YOU AS SUCH ON THE TERMS AND CONDITIONS STATED, THAT YOU RECEIVED ALL OF THE MATERIAL WHICH WAS VIEWED BY YOU ON INSPECTION PRIOR TO BID.

OUR OFFICE HAS NO AUTHORITY TO GRANT ANY RELIEF IN SUCH CASES ON ANY GROUNDS EXCEPT SUCH AS ARE ESTABLISHED AND RECOGNIZED BY JUDICIAL AUTHORITY, AND SINCE THE WEIGHT OF AUTHORITY SUPPORTS THE STRICT APPLICATION OF DISCLAIMER OF WARRANTY CLAUSES IN GOVERNMENT CONTRACTS OF SALE OF THIS KIND, THERE EXISTS NO LEGAL BASIS FOR OUR OFFICE TO AUTHORIZE THE ALLOWANCE OF ANY PART OF THE AMOUNT CLAIMED.

ACCORDINGLY, WE HAVE NO ALTERNATIVE BUT TO SUSTAIN OUR SETTLEMENT DATED AUGUST 27, 1962.