Ackerlind, Administrator of Lind, v. United States

Background

A private contractor agreed to carry coal from U.S. ports to Cavite in Manila Bay under a written government charter. The bidding specifications originally contained a printed clause about notice and lay days that the contractor successfully objected to, but a clerk’s error left the clause in the formal requisition and the written contract. The contractor signed the contract without carefully reading it, later discovered the mistake, and the Bureau of Supplies and Accounts notified the contractor that the clause had been omitted. The Government nonetheless refused to recognize the change, and the Court of Claims denied reformation, so the contractor appealed to this Court.

Reasoning

The key question was whether a written contract may be corrected to match what the parties actually agreed when a clerical mistake put the wrong clause into the government’s paperwork. The Court held that reformation is available here: the government’s bureaus acted as the Government’s agents and a clerical error should not prevent the writing from being made to conform to the agreement. The Court therefore reversed the Court of Claims on the reformation issue. The Court, however, affirmed the lower court on two related points: the carrier failed to prove generally available deeper berth depth needed to justify higher discharge rates and extra demurrage, and an independent contractor is not exempt from tonnage dues as if it were a government-operated vessel.

Real world impact

The decision lets private shippers correct written government contracts when clerical errors misstate agreed terms. It places the burden on carriers to prove factual bases for larger demurrage claims, and it confirms that independent carriers do not automatically receive tariff exemptions meant for government-controlled vessels.