1. A contract for the purchase of coal by the government at a
stated price per ton which does not require the government to take,
or limit its demand to, any ascertainable quantity is
unenforceable, for lack of consideration and mutuality. P.
262 U. S.
2. Such a contract, however, becomes valid and binding to the
extent to which it is performed, and a party who, abandoning an
earlier protest, voluntarily delivers coal under the contract is
limited to the contract price, and cannot recover more from the
United States. P. 262 U. S.
56 Ct.Clms. 413 affirmed.
Appeal from a judgment of the Court of Claims denying the
appellant's claim for the difference between the market price of
coal furnished the Navy and the price stated in a contract.
MR. JUSTICE BUTLER delivered the opinion of the Court.
This suit was brought to recover $3,650, being $3.65 per ton for
1,000 tons of coal furnished the Navy. Appellant
Page 262 U. S. 490
claims that it is entitled to the market price at the time of
delivery, $6.50 per ton. The United States claims that appellant
was bound by contract to furnish it for $2.85 per ton. The Court of
Claims made findings of fact, and concluded that appellant was not
entitled to recover.
In the spring of 1916, the Navy Department, being desirous of
making contracts for coal for the ensuing fiscal year ending June
30, 1917, issued its invitation for bids in the form of a schedule
containing general specifications and conditions and printed forms
of proposals for deliveries in stated quantities at 10 different
ports or stations. Included therein was a form of proposal for the
furnishing of 600,000 tons of coal to be delivered at Hampton
Roads, Virginia. On one of these forms, appellant submitted its bid
for coal of the kind and quality described:
"to be delivered . . . at such times and in such quantities as
may be required during the fiscal year ending June 30, 1917, . . .
10,000 tons steaming coal . . . for delivery . . . Hampton Roads,
Va. per ton $2.85, . . . $28,500."
The general specifications printed on the form contained the
"Quantities Estimated. -- It shall be distinctly understood and
agreed that it is the intention of the contract that the contractor
shall furnish and deliver any quantity of the coal specified which
may be needed for the naval service at the places named during the
period from July 1, 1916, to June 30, 1917, irrespective of the
estimated quantities stated, the government not being obligated to
order any specific quantity. The estimated quantities have been
arrived at from records of previous purchases. While they represent
the best information obtainable as to the quantities which will be
required, . . . they are estimated only, and are not to be
considered as having any bearing upon the quantity which the
government may order under the contract. "
Page 262 U. S. 491
"Deliveries. -- Deliveries to be made promptly, and in lots or
quantities specified . . . on call and at the prices accepted by
the Department. . . ."
"Reservations. -- The government reserves the right to reject
any or all bids and in accepting any bids; . . . the right is also
reserved to make such distribution of tonnage among the different
bidders for suitable and acceptable coals for the naval service as
will be considered to be for the best interests of the
"Notes. -- Bids on less than the entire quantity of coal
specified under each class will be received and considered. Such
partial bids must state the amount of tonnage it is proposed to
furnish, subject to the other conditions of these
Appellant was notified of the acceptance of its proposal, and,
on June 5, 1916, a contract was made containing the portions of the
bid and specifications above referred to.
March 26, 1917, appellant was informed by the Department that
the quantity estimated in its contract would be exceeded by ten
percent Appellant answered that, when it had furnished 10,000 tons,
it would consider its obligation under the contract discharged, and
that it was prepared to furnish the balance. The Department cited
the provisions of the contract as authority for requiring the
additional tonnage, stated that the same requirement was made of
other contractors, and expressed the hope that it would not be
necessary to resort to extreme measures to accomplish compliance.
Later, the Department informed appellant that the steamer
had been directed to coal with it, and that the
quantity required was 2,180 tons. Appellant answered that the
balance due under the contract was 560 tons, which it was ready to
supply at any time, and that this amount was all that it was able
to furnish. The Department insisted that the full cargo assigned to
must be furnished.
Page 262 U. S. 492
Appellant reiterated its position. June 9, the Department
advised appellant that failure to supply the tonnage ordered would
necessitate immediate purchase in the open market for its account.
June 12, appellant replied that it had arranged to supply the
the full quantity required, and that it was
"doing this under protest, which can be straightened out later."
June 14, appellant wrote that it would agree to supply the 2,180
tons ordered, with the understanding that no further assignments
would be made to it; that this was 1,620 tons more than it was
obligated to deliver; that this excess would be furnished under
protest, reserving the right to take the proper steps to recover
the difference between the current market price and the contract
price; it asked confirmation from the Department and stated that,
on receipt thereof it would furnish the coal.
June 15 the Department acknowledged appellant's letter of the
14th, but, as found by the Court of Claims, "not acceding to any
proposition therein contained," directed appellant:
"Your company will please supply Kennebec
tons coal, or such quantity as may be necessary to bring the total
tonnage delivered by you under contract 26,492 up to total
estimated quantity plus 10 percent or total 11,000 tons. Balance
cargo will be obtained elsewhere."
1. The language of the contract indicates that the parties
intended and understood that, depending on its own choice, the
Department might call for more or less than 10,000 tons of coal.
The forms of bid indicated a purpose to contract in advance for the
year's supply, and not to buy coal in the open market; they
informed bidders that the stated quantities were estimated on the
basis of previous purchases, and were not to be taken as exact
figures, and such forms were suitable to enable the Department
Page 262 U. S. 493
to award one contract for the total estimated quantity or to
distribute its requirements among a number of producers as it might
determine. Appellant's bid mentioned specifically 10,000 tons
(which was only one-sixtieth of the estimated total for Hampton
Roads). It provided that:
"It shall be distinctly understood and agreed that . . . the
contractor will furnish any quantity of the coal specified
of the kind and quality specified] that may be
needed . . . irrespective of the quantities stated, the
government not being obligated to order any specific
and that the stated quantities
"are estimated, and are not to be considered as having any
bearing upon the quantity which the government may order under the
contract; . . . the right is also reserved to make such
distribution of tonnage among the different bidders . . . as will
be considered for the best interests of the government."
There is nothing in the writing which required the government to
take, or limited its demand to, any ascertainable quantity. It must
be held that, for lack of consideration and mutuality, the contract
was not enforceable. Cold Blast Transportation Co. v. Kansas
City Bolt & Nut Co.,
114 F. 77, 81; Fitzgerald v.
First National Bank,
114 F. 474, 478; A. Santaella &
Co. v. Otto F. Lange Co.,
155 F. 719, 721 et seq.;
Golden Cycle Mining Co. v. Rapson Coal Mining Co.,
179, 182, 183.
United States v. Purcell Envelope Co., 249 U.
, is not inconsistent with the conclusion that the
contract here was not enforceable. There, the making and acceptance
of the bid consummated the contract, and it was construed to bind
the company to furnish and the Department to take the envelopes and
wrappers specified which the Department would need during the
period covered by the contract.
Page 262 U. S. 494
2. While the contract at its inception was not enforceable, it
became valid and binding to the extent that it was performed.
St. Louis Hay & Grain Co. v. United States,
191 U. S. 159
191 U. S. 163
Hartman v. Butterfield Lumber Co., 199 U.
, 199 U. S. 338
United States v. Andrews, 207 U.
, 207 U. S.
There was no duress or compulsory taking. The last order was
given, as prior orders had been given, with reference to the
contract. The failure of the Department in the correspondence
directly to decline the proposal made by appellant in its letter of
June 14 has no significance in favor of appellant. The Department
did not accept or in any manner acquiesce. Immediately its order
was given for 1,560 tons, making a total of 11,000 tons, the exact
amount it claimed it was entitled to call for under the contract.
The correspondence shows that the Department declined to accept
appellant's view and refused to entertain its requests or proposals
to leave the matter of price open. Appellant failed further to
object and delivered the coal. It is not important whether it was
persuaded that the Department's interpretation of the writing was
correct or, to avoid controversy, decided to fill the order. Its
earlier protest is of no avail (see Savage v. United
States, 92 U. S. 382
it must be held voluntarily to have accepted the order for the
additional 1,000 tons, and to have furnished it at the price
specified in the contract. Charles Nelson Co. v. United
States, 261 U. S. 17
the conduct and performance of the parties, the contract was made
definite and binding as to the 11,000 tons ordered and delivered
according to its terms. *
The judgment of the Court of Claims is affirmed.
* See Insurance Co. v. Dutcher, 95 U. S.
, 95 U. S. 273
Topliff v. Topliff, 122 U. S. 121
122 U. S. 131
Old Colony Trust Co. v. Omaha, 230 U.
, 230 U. S. 118
Nelson v. Ohio,
188 F. 620, 623; Bunday v.
224 F. 847, 854; Bransford v. Regal Shoe
237 F. 67, 69.