United States v. Milliken Imprinting Co.

Background

A group of printers who had been imprinting government stamps asked a court to rewrite a formal contract and to recover profits after losing customers to a newly hired company. The Commissioner of Internal Revenue sent an April 25 notice describing terms and how to apply. The printers sent a May 25 letter applying to continue work under those terms. The Court of Claims reformed the signed contract to include an omitted clause and awarded damages; the United States appealed.

Reasoning

The Court asked whether the April 25 paper was a binding offer and whether the May 25 letter accepted it. The opinion explains the April 25 paper was a general notice and application instructions, not an offer, and the May 25 letter was an application, not an acceptance. Parol evidence did not show any prior binding agreement or a mistaken omission from the formal written contract. Because no contract had been formed on the claimed terms, the Court held the United States was entitled to judgment as a matter of law and reversed the award.

Real world impact

The decision leaves the Government free to follow its announced procedures and to hire new contractors when it chooses. The printers who sought reformation and damages lose the award and remain without recovery on the reformed-contract theory. The Court confirmed that routine notices and applications ordinarily do not bind the Government absent a clear written agreement. Because the Court decided the issue as a matter of law, the reversal ends the claim on appeal.