Manufacturing Company v. United States

Supreme Court of the United States1873-10

17 Wall. 59284 U.S. 59221 L. Ed. 7151873 U.S. LEXIS 1402SCDB 1873-043

Summary · law.co

Holding. The Court reversed the judgment of the Court of Claims and remanded the case, directing the lower court to determine and award damages based on the actual harm the company sustained from the government's refusal to accept and pay for the carbines.

A manufacturing company contracted with the United States to produce six thousand carbines within six months. At the government's request, the company agreed to modify the weapon's design for the government's benefit, a change that necessarily extended the production timeline. The company completed the carbines within a reasonable time given the modifications, but the government refused to accept or pay for them, arguing it had only contracted for carbines deliverable within the original six-month period.

The Court held that when parties modify a contract by mutual agreement, an implied extension of time is incorporated to accommodate the modifications. The government could not accept the design changes and simultaneously insist on the original deadline. Since the company was ready to deliver the weapons within a reasonable timeframe and the government refused to accept them, the company was entitled to damages. However, the lower court's damage calculation was flawed because it relied on the carbines' current value rather than their value at the time of the government's refusal to accept them.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether contract modifications by mutual consent extend the performance deadline by implication
Whether a party requesting beneficial design changes may later refuse performance based on the original timeline
What damages measure applies when completed goods are rejected and no market price exists

Procedural posture

The case came before the Court on appeal from a judgment of the Court of Claims.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Mr. Justice MILLER

(having recited much as the reporter has given them, the chief points of the findings of the court below) delivered the opinion of the court.

"We think that the statement of this case, as it appears in the main points in the findings of the Court of Claims, is. the best argument in favor of the claimant that can be made. Wo cannot believe there would be any hesitation in holding an individual liable who, after making su.ch a contract as ivas made in this .instance, and requesting such alterations for his own benefit, and Avho, while aware of the increased time necessary, and that the other party was in good faith and Avith reasonable diligence performing the work, should say, “I will not receive or pay for the work done, because it was not done within the time first stipulated.”

There is no reason why the parties should not modify the contract by a change in the character of the weapon and time of delivery; and if it was Avell known to both that the change in the weapon required a longer time, as the court finds it was, it murt be implied that both parties consented to such an extension of time as Avas necessary or reasonable for the completion of the contract.

. The reply to this is, that the United States did not contract for six thousand carbines, but only for so many as could be made and delivered ivithin the .sixmonths, and that, nctAvithstaudjng the change ordered in their construction, as none were delivered within that time, they were not bound to take auy afterwards.

But this is a narrow and incomplete view of the contract. It leaves out the claimant’s rights in the matter. The claimant had a right .under the original contract to deliver six thousand carbines within six months, and have his pay, if he could make so many within that time.- He could have made them all within that time, as found by the court, but for his consent to the request of-tlre government to change for its benefit the structure of the weapon. As before stated, this request implied such an-extension of time as was known to be necessitated by that improvement, and the government must be bound by this reasonable intendment as an individual would have been.. As it is found substantially that the claimant was ready and offered to deliver within a reasonable time, he is entitled to such damages as he sus tained by the refusal of the government to receive and pay for the arms.

What are those damages ? It is not found that the weapons had at any time a market value or current selling price. It is not found what they were worth or could have been sold for at the time they were offered for delivery and refused. They were not then or at any time sold or offered for sale by the claimant. The only criterion of damage furnished is the finding of the court, that the six thousand carbines are now (at the time of the judgment of the court) in the possession of the company, and of the value of $3 each.

As the case stands, we reverse the judgment of the Court • of Clainls, and remand the case, with directions to render a judgment for the claimant for such damages as they may ascertain that the claimant has sustained by reason of the refusal of the United States to accept and pay for the six thousand carbines.