stating that constructive resort to a termination clause “occurs in situations in which the government has stopped or curtailed a contractor’s performance for reasons that turn out to be questionable or invalid”
How later courts described this case
- stating that constructive resort to a termination clause “occurs in situations in which the government has stopped or curtailed a contractor’s performance for reasons that turn out to be questionable or invalid”
- observing that while “parties to a contract may freely agree to various forms of risk allocation, . . . it is just as clear that parties may not agree that one or both may walk away from all obligations without rendering the contract unenforceable” as illusory
- stating that in a requirements contract, the “question is whether it is implicit in these [contract] terms ... that the [buyer] promised to gives all of its work” to plaintiff
- stating that “the government, unlike private parties, is assumed always to act in good faith, subject only to an extremely difficult showing by the plaintiff to the contrary”
Written by the judges who cited it.
Distinguished
Distinguished by Vila & Son Landscaping Corp. v. Posen Construction, Inc., 2012 Fla. App. LEXIS 15741 (2012)
Not only has the court of claims disavowed much of Torncello, the case is factually inapposite.
The opinion
NICHOLS, Judge,
concurring in the result:
I concur in the result, but I think the court takes a needlessly circuitous route to a destination we all agree on. In getting there, it tosses off needlessly sweeping dicta.
As regards the doctrine of consideration, the court puts aside the other 11 items and regards the "requirements” clause for pest control if needed, as if it stood alone. I am not sure a provision for use of pest control services at the government’s sole election is unsupported by consideration if other contract undertakings are not similarly avoidable on the government side. Moreover, a termination of a contract for convenience is valid only in the absence of bad *52 faith or a clear abuse of discretion. National Factors, Inc. v. United States, 204 Ct.Cl. 98 , 492 F.2d 1383 (1974). Here we have a putative or "constructive” termination only, and the court will not suppose such a termination as exonerating defendant from all its commitments, if the act would be an abuse of discretion. If consideration is furnished, the court will not inquire into its adequacy. Mills v. United States, 187 Ct.Cl. 696 , 410 F.2d 767 (1969).
As the termination cannot be postulated if it would be an abuse of discretion, I turn to what would constitute the abuse. We need not consider cases not before the court. Here the government stated it would evaluate; bids on all the items as an entirety and make the award only to one who had bid on all items. Having promised this, it would be estopped to eliminate from the award by termination any items just because, separately considered, they were at unfavorable prices, while retaining all those bid at favorable prices. The administration of the contract must be consistent with the rules used in evaluating the bids, to which the bidders conformed in bidding.