J. E. Hathaway & Co. v. United States

Background

A federal agency solicited sealed bids to repair a revetment in Michigan. A construction firm agreed by written contract dated May 11, 1910, to finish by December 1, 1910, but finished 68 days late. The Government acknowledged 29 of those days were caused by extra work it required and excluded 10 Sundays and holidays, leaving 29 days the Government treated as contractor delay and deducted $3,082 from the contract price. The contractor also argued delay in Government approval of its bond and contract—delivered May 18 but approved June 9 with notice June 13—was caused by the surety’s failure to file a corporate vote.

Reasoning

The central questions were whether the contractor was entitled to more time because of the approval delay and whether the Government could collect liquidated damages plus inspection and superintendence expenses. The Court accepted the Court of Claims’ finding that the Government did not unreasonably delay approval and therefore the contractor was not entitled to extra time. The Court also upheld the contract clause making time of the essence (meaning timely completion is essential) and requiring the contractor to pay, in addition to liquidated damages ($100 per day), expenses for inspection and superintendence (here $182). Finally, a separate argument about additional credit for extra work was not reviewed because it was not raised below. The Supreme Court affirmed.

Real world impact

This ruling leaves the contractor without recovery and enforces express contract terms assessing both liquidated damages and additional inspection costs. For government work, it reinforces that courts will defer to factual findings about delays and will enforce clear contract clauses allocating damages. Contractors should ensure bonds and required documents are timely and understand that contractual damage provisions can be applied cumulatively.