Lipshitz & Cohen v. United States

Background

A pair of private buyers agreed to buy obsolete metal listed for sale at several forts after submitting a written bid to buy “all the above described material, as is where is” for $1,055 with a 20% deposit and a six-month removal option. Their offer was accepted on May 24, 1922. The buyers did not inspect the materials and relied only on the government’s schedule of weights. When they began removing the junk in July, they found many items missing so that the total weight taken was roughly half the amount listed. The buyers complained and later sought to recover profits they said they lost because the listed weights proved inaccurate.

Reasoning

The core question was whether the government had broken its promise by delivering less material than the schedule indicated. The trial judge found, and the Court agreed, that the sale covered specific lots of condemned, obsolete material sold “as is,” and that the stated weights were only approximate estimates, not guaranteed quantities. The Court relied on earlier authority saying quantity listings are estimates that require good faith, not warranties. The record did not show the United States failed to deliver the materials that actually existed at the forts when the contract was made. The Court therefore upheld the lower-court judgment for the Government.

Real world impact

The decision means buyers who accept ‘as-is’ government surplus sales and rely solely on published weight estimates face a high risk if quantities prove smaller than listed. It emphasizes the importance of inspection and makes clear that approximate weights in government sale schedules are not promises that allow automatic recovery for shortages.