United States v. California Bridge & Constr. Co., 245 U.S. 337 (1917)

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United States v. California Bridge & Construction Company

Nos. 39

, 40

Argued November 9, 12, 1917
Decided December 10, 1917
245 U.S. 337

APPEALS FROM THE COURT OF CLAIMS

Syllabus

Claimant entered into a contract with the United States to erect certain structures "at the United States navy yard, Mare Island." Held, upon the facts, as found by the court below, that the site selected before the execution of the contract was selected provisionally, and subject to be changed by the government for some other location within the navy yard, and that claimant so understood when the contract was made.

A judgment exonerating a surety on a government construction contract, upon the ground that the location of the work was changed by the United States without the surety’s consent, is not res judicata in respect of the right of the United States to make the change as against the principal contractor when the latter was not a party to the action in which the judgment was rendered and when the right is dependent not upon the terms of the written contract, but upon notice and representations aliunde which, in the case of the surety, may have been different, and so have produced a different understanding, than in the case of the principal.

Having annulled a construction contract for default, the United States relet the contract at higher cost. Under supplemental agreements with the new contractor, certain deviations from the contract were made, involving a cost of about 6% of the total contract price and requiring estimates of the attendant expenses. Notwithstanding that these changes, on the whole, reduced the cost of the work, held, because of the deviations, that the difference between the cost and the original contract price was not a proper measure of the original contractor’s liability.

In view of the history of the negotiation preceding the contract here in question, held that it would be highly inequitable to allow the government’s claim of liquidated damages.

50 Ct.Clms. 40 affirmed.

The cases are stated in the opinion.