Natus Corp. v. United States

178 Ct. Cl. 1

 

RULE:

How performance shall be achieved, or at what price, is a matter properly reserved for the contractor, and the contractor may claim a breach of warranty only if the specified method demands resort to the economically unrealistic. The warranty is not breached when performance simply becomes more costly than anticipated.

FACTS:

Parties contracted for plaintiff to produce and deliver landing mats. During production, the plaintiff found the cost to be higher than expected, and claimed impossibility, or in the alternative, a breach of contract. The defendant disagreed, and the plaintiff sued in order to get out of the contract. The Armed Services Board ruled against the plaintiff. The plaintiff now appeals, and seeks to recover additional expenses by way of equitable adjustment in contract price alleging impossibility of performance.

ISSUE:

Whether plaintiff's claim of impossibility of performance was subjective or objective.

ANSWER:

Plaintiff's claim of impossibility of performance was a subjective claim.

CONCLUSION:

On appeal, the Court of Claims affirmed the lower court's decision. It held that the plaintiff's case, when evaluated in light of the record, appeared to be more a matter of subjective limitation, rather than objective impossibility. Plaintiff had not shown that performance would be economically unrealistic and the defendant did not guarantee the contractor's profit. Plaintiff's interpretation of the contract drawing was reasonable but warranty was not breached when performance simply became more costly than anticipated. Therefore, the court affirmed the Board's decision, plaintiff's motion for judgment of liability was denied, and the petition was dismissed.

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