United States v. Rice

Decision Date09 November 1942
Docket NumberNo. 31,31
Citation317 U.S. 61,87 L.Ed. 53,63 S.Ct. 120
PartiesUNITED STATES v. RICE et al
CourtU.S. Supreme Court

Francis Biddle, Atty. Gen., and Mr. Valentine Brookes, of San Francisco, Cal., for petitioner.

Mr. R. Aubrey Bogley, of Washington, D.C., for respondents.

Mr. Justice BLACK delivered the opinion of the Court.

We granted certiorari to review a judgment against the United States by the Court of Claims, 95 Ct.Cl. 84, interpreting a widely used standard form construction contract in a manner alleged to be in conflict with this Court's interpretation of an analogous contract in H. E. Crook Co., Inc., v. United States, 270 U.S. 4, 46 S.Ct. 184, 70 L.Ed. 438.

Respondent agreed to install plumbing. heating, and electrical equipment in a Veterans' Home to be erected at Togus, Maine, while another contractor was to do the general work of preparing the site and constructing the building. Respondent agreed, for a stipulated price, to begin work upon notice to proceed and to finish by the time the work had been completed by the principal contractor. If respondent failed to complete the work within the time thus set, the government was entitled to terminate the contract or to require the payment of liquidated damages. The length of time allowed the principal contractor under his contract, subject to certain qualifications discussed below, was 250 days, and it was into this schedule that respondent was to coordinate his own activity.

The government gave notice to the general contractor to begin work on May 9, 1932. On May 12, respondent was notified to begin and early in June its superintendent arrived in Maine with tools and equipment. Upon his arrival he found that the general contractor had been stopped by the government because of the unexpected discovery of an unsuitable soil condition. It became necessary to change the site of the building and to alter the specifications, and because of the delay attendant upon preparing a new foundation, respondent was unable to begin work until October. As a consequence, overhead expenses accumulated during the period of delay, and much of the work which respondent's employees otherwise would have done either during warm weather or after the building was enclosed was done outside in cold weather.

Because of the delay and pursuant to the adjustment clauses of the contract the government extended the time of performance by respondent and because of structural changes, it re-adjusted the amount due. It increased payments to the principal contractor, reduced the payment to respondent by about $1,000 because of construction economies under the new plans, and waived any claim to liquidated damages for the period of the extension. The hospital was completed some months after it would have been finished had it not been for the change of plan.

The respondent was paid the full amount agreed on for the work it did. It then sued for about $25,000 for damages alleged to have been suffered due to delay for which the government was responsible. The Court of Claims held the government was liable for damages resulting solely from delay, but found that $13,600 of the alleged loss was due to respondent's own faulty estimate and financial conditions, and that $3,000 of it was caused by respondent's and the principal contractor's delays. Respondent sought no review of denial of this part of its claim. However, the court concluded that the balance claimed, $9,349, arose from overhead costs during the summer of 1932 when the new foundation was being prepared and from a decrease in labor effectiveness resulting because much of the work had to be done outside in cold weather. The judgment rendered under this conclusion is what we have before us.

The chief issues of the case are whether the delay in commencing the construction was a breach of contract by the government; whether, regardless of the answer to that question, respondent was entitled to an equitable adjustment for damages resulting from the delay, in addition to the extension of time already granted; and whether respondent is barred from any recovery because he failed to appeal certain decisions affecting his contract to the chief officer of the department. Under the view we take of the first two of these questions, it is unnecessary to answer the third.

I. The government contends, as it did in the Crook case, supra, that the change in specifications resulting in delay was not a breach of the contract, but in accordance with its terms; that the extent of its obligation for permitted changes was fixed by the contract; and that for delay the government was required to do no more than grant an extension of time. Put another way, the government concedes that if an alteration of plan required respondent to use an extra 50 tons of steel, the government would be liable for the value of the steel and the cost of installation; but it argues that under the terms of this contract an extension of time should be accepted as full equitable adjustment for all damages caused by the fact that the work was done at the later period made necessary by the permitted change. Essentially it repeats the doctrine of Chouteau v. United States, 95 U.S. 61, 68, 24 L.Ed. 371: 'For the reasonable cost and expenses of the changes made in the construction, payment was to be made; but for any in- crease in the cost of the work not changed, no provision was made.'

We agree with this view. We do not think the terms of the contract bound the government to have the contemplated structure ready for respondent at a fixed time. Provisions of the contract showed that the dates were tentative and subject to modification by the government. The contractor was absolved from payment of prescribed liquidated damages for delay, if it resulted from a number of causes, including 'acts of Government' and 'unusually severe weather.' The government reserved the right to make changes which might interrupt the work, and even to suspend any portion of the construction if it were deemed necessary. Respondent was required to adjust its work to that of the general contractor, so that delay by the general contractor would necessarily delay respondent's work. Under these circumstances it seems appropriate to repeat what was said in the Crook case, that 'When such a situation was displayed by the contract it was not to be expected that the Government should bind itself to a fixed time for the work to come to an end, and there is not a word in the instrument by which it did so, unless an undertaking contrary to what seems to us the implication is implied.' H. E. Crook Company, Inc., v. United States, supra, 270 U.S. 6, 46 S.Ct. 184, 70 L.Ed. 438. Decisions of this Court prior to the Crook case also make it clear that contracts such as this do not bind the government to have the property ready for work by a...

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  • JL Simmons Company v. United States
    • United States
    • U.S. Claims Court
    • July 16, 1969
    ...performance time and by payment of any added direct cost occasioned by changes to correct those errors. Defendant relies on the rule of the Rice United States v. Rice, 317 U.S. 61, 63 S.Ct. 120, 87 L.Ed. 53, Blair United States v. Blair, 321 U.S. 730, 64 S.Ct. 820, 88 L.Ed. 1039 and Foley U......
  • Buckley & Co., Inc. v. State
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    • New Jersey Superior Court
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    ...contract, would not generate a valid claim for damages even in the absence of the no-damage provisions. Cf. United States v. Rice, 317 U.S. 61, 63 S.Ct. 120, 87 L.Ed. 53 (1957); Bruno Law v. United States, 195 Ct.Cl. 370, 383 It is also to be noted that the amendment of the plans to provide......
  • Utah Construction and Mining Company v. United States
    • United States
    • U.S. Claims Court
    • March 12, 1965
    ...and may introduce evidence de novo concerning any unreasonable delay that may have been occasioned thereby. In United States v. Rice, 317 U.S. 61, 63 S.Ct. 120, 87 L.Ed. 53 (1942), it was held that, where a contract was modified on account of changed conditions encountered, the contractor w......
  • Merritt-Chapman & Scott Corporation v. United States, 44-66.
    • United States
    • U.S. Claims Court
    • July 15, 1970
    ...to the remainder of the work not changes sic. This principle was established by the Supreme Court sic in Rice U. S. v. Rice v. U. S., 317 U.S. 61 63 S.Ct. 120, 87 L.Ed. 53; Choteau sic v. U. S., 95 U.S. 61 24 L.Ed. 371; Crook Co. v. U. S., 270 U.S. 4 46 S.Ct. 184, 70 L.Ed. 438. It has been ......
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1 books & journal articles
  • The Construction Industry in the U.S. Supreme Court: Part 1, Contract Law
    • United States
    • ABA General Library The Construction Lawyer No. 41-2, April 2021
    • April 1, 2021
    ...Co., 318 U.S. 120 (1943). 81. Id. at 122. 82. United States v. Howard P. Foley Co., 329 U.S. 64 (1946); United States v. Rice, 317 U.S. 61 (1942); H.E. Crook Co. v. United States, 270 U.S. 4 (1926); Wells Bros. Co. of N.Y. v. United States, 254 U.S. 83 (1920). 83. Wells Bros. Co. , 254 U.S.......

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