Horowitz v. United States
Headline: Buyer’s claim for lost profits after a delayed government silk shipment is blocked as the Court affirms that a nationwide embargo was a public sovereign act, so the United States is not liable.
Holding: The United States cannot be held liable for contract damages when shipment delays result from a public, government-wide embargo, so the buyer’s damage claim fails.
- Prevents buyers from recovering contract losses caused by government-wide embargoes.
- Holds contractors bear losses from broad government policy decisions like shipping bans.
- Limits contract liability when delays stem from public, general governmental acts.
Summary
Background
A buyer from New York placed a successful bid to buy Habutai silk from a government salvage board. The salvage board’s textile chief told him he could resell the silk before finishing payment and that government departments would ship the silk from Washington quickly after shipping instructions were sent. The buyer paid part of the price, sold the silk to a New York company, then paid the balance and asked the board to ship. Although the board later said it had ordered shipment, the silk stayed in Washington while market prices fell. The buyer says a government railroad embargo delayed shipment, forcing him to sell at a $10,811.84 loss and sued the United States for damages under the Tucker Act.
Reasoning
The Court assumed there was a valid sale and prompt-shipment promise but focused on one question: can the United States be held liable in contract for delays caused by its own public policy actions? The Court relied on long-standing authority that the government, when acting in its sovereign role by issuing public and general orders, cannot be treated as a contract breach by private plaintiffs. Because the delay here was alleged to result from a government-wide embargo, the Court held the complaint failed to state a recoverable contract claim and affirmed the dismissal.
Real world impact
This ruling means people who buy goods from or contract with the government may not recover contract losses when a general government action, like an embargo or other broad policy, causes delay or damage. The opinion did not decide whether the embargo itself was valid and leaves the buyer without the claimed recovery.
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