R. A. Weaver and Associates, Inc. v. Asphalt Const., Inc., 77-1820
| Decision Date | 15 November 1978 |
| Docket Number | No. 77-1820,77-1820 |
| Citation | 190 U.S.App.D.C. 418,587 F.2d 1315 |
| Parties | , 25 UCC Rep.Serv. 388 R. A. WEAVER AND ASSOCIATES, INC. v. ASPHALT CONSTRUCTION, INC., Appellant. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Tarrant H. Lomax, Washington, D. C., for appellant. Paul M. Rhodes, Washington, D. C., was on the brief for appellant.
Harold F. Blasky, Washington, D. C., with whom Laurence Schor, Washington, D. C., was on the brief, for appellee.
Before WRIGHT, Chief Judge, and BAZELON and MacKINNON, Circuit Judges.
Opinion for the court filed by Chief Judge, J. SKELLY WRIGHT.
This appeal challenges a decision of the United States District Court for the District of Columbia holding that a contract for a fixed amount of limestone existed between R. A. Weaver & Associates, Inc. (appellee) and Asphalt Construction, Inc. (appellant) and that Asphalt Construction was in breach of that contract. We agree with the trial court that a contract existed between the parties, but we disagree as to the nature of the contract. In our view it was not, as the District Court held, a contract for a fixed amount of limestone, but rather one for that amount of limestone required by appellant to perform its subcontracting work on the Government's Constitution Gardens project. Since no limestone was required by appellant, the contract was not breached when appellant informed appellee that no limestone would be ordered. Accordingly, we conclude that the trial court committed reversible error in holding appellant in breach and that the trial court's findings as to liability and damages are, in consequence, rendered nugatory.
By agreement appellee R. A. Weaver & Associates, Inc. was to supply appellant Asphalt Construction, Inc., a subcontractor on the National Parks Service project at Constitution Gardens, with crushed limestone to be used on that project. The document that served as the basis of agreement between appellant and appellee was a two-page "Proposal and/or Contract" provided by appellee; it was sent by appellee to appellant on March 1, 1975. As will be further described below, this "Proposal and/or Contract" made reference to certain Government bid documents, portions of which the trial court found to be incorporated by the "Proposal and/or Contract" when it determined the amount of limestone involved in the transaction.
The genesis of the present dispute can be traced to April 24, 1975, when the National Park Service, pursuant to the "changes" and "termination" clauses 1 in its contract with appellant's prime contractor, decided to delete the provision for limestone. The prime contractor notified appellant of the Government's decision, and appellant, before any orders for limestone had been placed, in turn notified appellee that no limestone would be required. After unsuccessful attempts by the parties and the Government to arrive at an equitable solution, 2 appellee filed suit in the District Court, pursuant to that court's diversity jurisdiction, 28 U.S.C. § 1332 (1976), 3 alleging that appellant had breached its contract to purchase limestone from appellee.
The District Court found that an enforceable contract for a fixed amount of limestone existed between appellee and appellant and that appellant was indeed in breach. 4 The District Court went on to refer the case to a Special Master to make findings of fact and conclusions of law with respect to the issue of damages. 5 Subsequently, acting on those findings and conclusions, the court held appellant liable to appellee for damages amounting to $20,905.56 plus interest from June 30, 1976. 6 Appellant appeals from the District Court's judgments as to the existence of a contract, the nature of the contract found to be in existence, and the amount of liability.
The District Court found that an enforceable contract existed between the parties. On appeal appellant contests this holding by arguing that the agreement was not supported by consideration and that the agreement contained no quantity provision. If appellant is correct in either respect, there was indeed no contract. To determine the merits of appellant's claim, we must turn first to an examination of the agreement between the parties.
The agreement, as styled by appellee, was termed a "Proposal and/or Contract." It was submitted by appellee to appellant on February 12, 1975, and, as appellant concedes, appellant's brief at 5, and as the document plainly evinces, JA 4, it was "accepted" by appellant on March 1, 1975. This document provided, in part, that appellee would
furnish our Genuine Select Buff Crushed Limestone coarse and fine aggregate of a Grade and Quality to conform to specified requirements as follows and to the Notes and Details listed.
Id. The "specified requirements as follows" was a reference to Government "Bid Item # 45 Crushed Limestone Aggregate." Inspection of Bid Item # 45, JA 8, reveals the following: " 45/02655 Crushed stone paving ......176,200S.F.
@$ (Unit Price) = $ (Amount of Bid) ." The number "02655" is a reference to another Government bid document, JA 10, which also relates to crushed stone paving (hereinafter termed "section 02655").
The District Court accepted without discussion that the agreement laid out above was supported by consideration. Presumably the court was guided by the belief that the agreement constituted a bilateral contract in which the parties' mutual promises served as consideration. See generally 1 A. Corbin, Corbin on Contracts §§ 142-150, at 611-671 (1963). The respective promises supporting bilateral contracts must be scrutinized to determine whether the performance promised constitutes sufficient consideration. This is to say that the mere uttering of the promises, as opposed to their content, will not itself supply the consideration. See J. Calamari & J. Perillo, Contracts 156 (2d ed. 1977); 1 A. Corbin, Supra, § 143, at 614 (). In the present case appellee promised to supply and appellant to buy limestone. Their agreement specified a unit price, 7 a method of delivery, 8 and a method of payment. 9 Reserving for a moment discussion of the quantity of limestone specified by their agreement, there is no doubt that the consideration, in the form of the substance of the parties' promises, necessary to elevate the agreement to the status of an enforceable contract was present. This conclusion comports with settled commercial practice. The use of proposals sent by suppliers to purchasers, such as the "Proposal and/or Contract" employed in this case, as the basis of a contract that arises upon acceptance of the proposal is certainly not a rare occurrence in the business world. See, e. g., Romine, Inc. v. Savannah Steel Co., 117 Ga.App. 353, 160 S.E.2d 659, 661 (1968) ().
Appellant argues further that Section 2-201 of the Uniform Commercial Code (U.C.C.), 10 Article 2's version of the Statute of Frauds, requires a quantity term in order for an agreement to be an enforceable contract and that the present agreement does not contain such a term. To determine whether this requirement has been met, inquiry must focus initially on the part of the agreement that, according to the District Court, incorporated the terms of the Government bid documents, in which any quantity term is to be found. That portion of the agreement obligated appellee to supply limestone "of a Grade and Quality to conform to specified requirements" that is, to conform to Bid Item # 45 and its supporting document, section 02655. This Government bid documentation, in turn, states that crushed limestone of a specified depth would be required to cover an area comprising 176,200 square feet and that certain qualitative standards should be met in the limestone supplied. JA 8-14. Thus, although the incorporating language of the "Proposal and/or Contract" talks of "Grade" and "Quality," the bid documentation talks also of quantity. Appellant argues that this disparity in language means that the quantity provision as derived from Bid Item # 45 and section 02655 was not incorporated into the agreement.
We disagree. Although the agreement's incorporation language is markedly imprecise, the thrust of the language, and of the surrounding transaction, is to incorporate the terms and conditions of Bid Item # 45 and section 02655, including the quantity term. Hence the agreement survives scrutiny under U.C.C. § 2-201. But, as the next section of this opinion concludes, the effect of incorporating all the terms and conditions of Bid Item # 45 and section 02655, as contrasted with the selective incorporation practiced by the District Court, is to supply the contract not with a specific quantity term, as held by the District Court, but with one based on the requirements of the appellant in doing its subcontracting work for the Government.
Normally a requirements contract is based on a seller's obligation to supply the designated commodity to the buyer to the extent of the latter's needs during a specified period of time. See, e.g., 1 Williston on Contracts § 104A, at 402 (W. Jaeger ed.) (3d ed. 1957); Shader Contractors, Inc. v. United States, 276 F.2d 1, 4, 149 Ct.Cl. 535 (1960). Thus a court in fixing the remedy for breach of such a contract looks generally to the parties' ongoing relationship to see what usually is "required" under the contract to determine the damages for which the party in breach is liable. See generally J. White & R. Summers, Uniform Commercial Code 103-109 (1972). But this is...
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