# Dadourian Export Corporation v. United States

> Court of Appeals for the Second Circuit · June 5, 1961 · 291 F.2d 178

URL: https://www.frixlaw.com/law-library/cases/9448000

## Case

- **Full name:** DADOURIAN EXPORT CORPORATION, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee
- **Court:** Court of Appeals for the Second Circuit
- **Decided:** June 5, 1961
- **Citations:** 291 F.2d 178; 1961 U.S. App. LEXIS 4299
- **Precedential status:** Published
- **Opinion:** Dissent by Friendly
- **Judges:** Clark, Medina, Friendly
- **Cited by:** 14 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9448000

## Opinion text

FRIENDLY, Circuit Judge
(dissenting).
In my view plaintiff’s motion for summary judgment should have been granted and the Government’s denied.
Understanding of this case seems to me to demand fuller statement of the Government’s invitation and of plaintiff’s bid than the majority’s. Not one but three groups of cargo nets, Items 53 to 58, 59 to 64, and 65 to 73, were offered. They were respectively described as follows:
“Nets, Cargo, 12'xl2', Meshes 8" Square, frame of 3% circ fiber rope netting of 3" circ fiber rope with lanyards loose (Unused)
“Nets, Cargo, 18’ long x S' wide Meshes 8" sq frame of 3% circ fiber rope netting of 3" circ fiber rope with lanyards loose (Unused)
“Nets, Cargo, 20'x40', Manila rope meshes 8" square frame 3% circ mesh rope, 3" circ with lanyards Paulsen Weber or equal loose.” 1
Plaintiff’s bids for Items 65-73 were a higher percentage of the Government’s stated acquisition cost than in the case of the other groups; it was the successful bidder only for the former.
It is plain beyond peradventure that, had this been an ordinary sale, plaintiff would have been entitled not merely to rescind but to recover damages when it discovered that a portion of the nets were not “Manila rope,” which the Government’s trial attorney before the Board of Contract Appeals conceded to be worth “a vast deal more than fiber rope.” 1 Williston, Sales (1948 ed.), p. 577: Uniform Sales Act, § 14; Uniform Commercial Code, § 2-313. Here plaintiff properly makes no claim for damages; it insists only that it not be held to a bargain it never made.
If plaintiff is to be so held, this must be because of paragraphs 1 or 2 of the General Sale Terms and Conditions. Paragraph 1, entitled “Inspection,” is not adequate to that office. It says only that “failure to inspect” will not “constitute grounds for a claim or for the withdraw *186 al of a bid after opening.” Although this ineptly worded clause may have the effect of excluding any liability under an implied warranty of quality, it surely does not go so far as to say that because the prospective buyer does not inspect before bidding, the seller may require him to accept goods not conforming to the description, see Uniform Commercial Code, § 2-316(3) (b) and comment 8.
The argument that paragraph 2 supports the Government’s position is that, in a sale of specified goods, the buyer’s right to reject for failure of the goods to conform to the description rests on the seller’s breach of warranty that the goods will so conform; 2 hence, since paragraph 2 negates any warranty “as to quantity, kind, character, quality, weight, size or description of any of the property, or its fitness for any use or purpose,” the buyer has no right to reject or rescind.
The first answer to this is that courts properly decline to give so literal an effect to a disclaimer of a warranty of description, as is clearly shown by Chief Judge Magruder’s opinion in United States v. Silverton, 1 Cir., 1952, 200 F.2d 824 , 826 and this Court’s in American Elastics, Inc. v. United States, 2 Cir., 1951, 187 F.2d 109, 113 . 3 My brother Medina’s opinion makes it plain that he would not follow the logic of the Government’s argument so as to hold the plaintiff if Items 65-73 had turned out to be canvas sheets rather than cargo nets; I doubt he would if the nets had proved to be made of cotton. Hence the question becomes one of degree. In my brother Medina’s view “Manila rope” did not go to the essence; to my mind, the sharp differentiation among the three descriptions and the Government’s concession that Manila rope was worth “a vast deal more” than fiber rope, make the case analogous to Chief Judge Magruder’s example in United States v. Silverton, not, indeed, of apples and oranges, but of “Webbing, scrap, mixed” which turned out to be entirely scrap.
A second answer is that the construction of paragraph 2 urged by the Government fails to take account of the provision that “no claim will be considered for allowance or adjustment or for rescission of the sale based upon failure of the property to correspond with the standard expected; this is not a sale by sample.” If the preceding clause truly had the effect of so completely negating the warranty that the goods were of the sort advertised as to deprive the buyer of his normal right to reject or rescind, there was no need for the latter provision. We are bound to endeavor to give effect to all words even of a Government contract, and also to construe language to give a sensible result. It is because of this latter requirement that the courts refuse to construe this broad disclaimer of a warranty of “kind, character * * or description” so as to permit the delivery of apples in place of oranges, although that is what the words say. Yet there is a way in which those words can be given literal effect and the courts spared the almost impossible task of having to determine what part of the description is essential and what is not. That is by reading the first portion of the sentence as dealing with claims for damages against the Government and the second portion as regulating claims “for allowance or adjustment or for rescission * * On that reading the sen *187 tence is no bar; plaintiff is not seeking damages and its claim for rescission is based, not “upon failure of the property to correspond with the standard expected,” but upon failure to be the kind of property that was promised.
Finally — and I pose this as a question rather than a conclusion — does not a buyer’s right to reject goods not conforming to the description rest on a concept even more basic than breach of warranty ? Clearly that is so when the goods are unspecified at the time of the sale. Pope v. Allis, 1885, 115 U.S. 363, 371-372 , 6 S.Ct. 69 , 29 L.Ed. 393 ; United States v. Koplin, D.C.N.D.Ga.1928, 24 F.2d 840, 841 , Sibley, J. But even when the goods are specified, is there not a failure of the minds to meet, bringing into play a principle akin to that of Raffles v. Wichelhaus, [1864] 2 H. & C. 906, see 1 Williston, Contracts (3d ed.) § 95, 4 or the rule whereby courts of the British Commonwealth allow rescission after acceptance in such cases on the ground of a breach of condition despite the general English doctrine that the buyer’s only remedy after acceptance is a suit for breach of warranty, Varley v. Whipp, [1900] 1 Q.B. 513; Cotter v. Luckie, [1918] N.Z. LR 811; cf. Kirkpatrick v. Gowan, Ir.Rep. 9 C.L. 521 (1875); 34 Halsbury, Laws of England (1960), pp. 48, 50? The Government intended to sell the advertised lots, whether Manila rope or not; plaintiff intended to buy only if they were Manila. When the error is discovered before the goods are delivered, and the transaction can be rescinded without cost to the Government other than readvertising the goods as what they really were, what reason is there to hold the buyer, even on a sale of surplus? Per contra, what reason would there be to force the Government to deliver surplus goods advertised as glass if these turned out to be rock crystals or industrial diamonds? Of course, parties can use language that gets them into precisely these predicaments, but it ought be very clear they have done so before they are held. See Vigers Brothers v. Sanderson Brothers, [1901] 1 K.B. 608; Karsales (Harrow) Ltd. v. Wallis, [1956] 2 All E.R. 866, C.A. Such a view may lie behind the Uniform Commercial Code’s reclassification of the warranty of conformity to description from implied to express, and its negative attitude toward disclaimers of such a warranty, § 2-316, see also comment 1 on § 2-313, and § 2-302. Cf. Andrews Brothers (Bournemouth), Limited v. Singer and Company, Limited, [1934] 1 K.B. 17. I would follow the lead of the Code, whether the transaction here be deemed governed by the law of Pennsylvania or, as it probably is, by “federal law,” Clearfield Trust Co. v. United States, 1943, 318 U.S. 363, 366 , 63 S.Ct. 573 , 87 L.Ed. 838 , with the Code taken as a source, N. Y., N. H. & H. RR. Co. v. R. F. C., 2 Cir., 1950, 180 F.2d 241, 244 . Moreover, if we are fashioning federal law, I would doubt that the ultimate best interests of the Government, even in surplus disposal, are advanced by a rule permitting such insistence on or, as I view it, beyond the letter of the bond as has been practiced here.
. Although the word “(Unused)” did not appear after the description in Item 65, it did in Items 66-73.
. This warranty is stated to be “implied” in the Uniform gales Act, § 14, but “express” in the Uniform Commercial Code, § 2-313, the law of Pennsylvania where this sale occurred, Act of April 6, 1953, P.L. 3; 12A Purdon’s Penna.Stats.Ann. § 1-101 et seq.
. I am unable to accept the majority’s distinction of the American Elastics case based on lack of opportunity by the buyer tó inspect before the contract was made. The contract liad an inspection clause substantially identical with that here, and the record shows that the buyer’s president admitted “It is possible” that he was “requested to visit the contractor’s plant and inspect the material personally.” Moreover, neither this Court nor Judge Rifkind in the District Court, S.D.N.Y. 1949, 84 F.Supp. 194, 197 , went on that ground.
. It may be that Frigaliment Importing Co. v. B. N. S. International Sales Corp., D.C.S.D.N.Y.1961, 190 F.Supp. 116 , decided by the writer, might better have been placed on that ground, with the loss still left on the plaintiff because of defendant’s not unjustifiable change of position, 5 Williston, Contracts (2d ed.), § 1595; American Lav/ Institute, Restatement of Restitution, § 178.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9448000. Public record. Not legal advice.