American Smelting and Refining Co. v. United States
Headline: Seller’s claim for higher wartime copper price blocked as Court enforces the government letters as a binding contract, keeping the original 23.5¢ per pound despite delivery delays caused by the Government.
Holding: The Court held that the government’s March 28 letter and the April 11 acceptance created a binding contract at 23.5 cents per pound, rejected duress and requisition claims, and affirmed dismissal of the seller’s petition.
- Written government offers can form binding contracts during wartime.
- Suppliers cannot later claim higher wartime prices after accepting the offer.
- Sellers should preserve pricing objections in writing before accepting government terms.
Summary
Background
The Government negotiated an order for copper for the French Government with a private copper company and sent a March 28, 1918 letter offering 30,000 metric tons at 23.5 cents per pound, with a formal contract to follow. A company representative accepted that letter on April 11. Most copper was delivered before July 2, 1918, but 20,500,620 pounds arrived later after the Government raised the official price to 26 cents on July 2.
Reasoning
The Court addressed whether the March 28 letter and the April 11 acceptance created a binding contract and whether the seller could instead treat the sale as a compulsory government requisition or claim duress to demand the higher July price. The Court held the letters did form a contract at 23.5 cents and rejected the seller’s arguments about duress and requisition remedies. The Court explained that the seller had accepted and kept the contract alive and therefore could not insist on the later, higher price. The petition for additional payment was dismissed and that dismissal was affirmed.
Real world impact
The decision means suppliers who accept government offers in writing can be bound to the agreed price even if wartime conditions delay delivery and official prices later rise. Sellers seeking higher wartime prices must preserve those claims in their agreement or seek formal damages rather than later claiming no contract existed.
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