Case ID: us-ct-cl_63/html/0676-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief Justice Taet", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

BARRETT COMPANY v. UNITED STATES
    [60 C. Cls. 343; 273 U. S. 227]
    Judgment was rendered in favor of the United States, in part, in the court below. On appeal the judgment was
    
      reversed ^
    
    the Supreme Court deciding:
    1. After cancellation of a contract under wliieli supplies were to be be manufactured for tbe Government in a plant to be built with Government funds and to belong to tbe Government, tbe making of a supplemental agreement by wbicb tbe contractor bought tbe plant for a price stated did not affect tbe contractor’s claims growing out of tbe termination of tbe original contract, when tbe later agreement was expressly without prejudice to them.
    2. The just compensation to which a claimant is entitled upon cancellation of a contract by tbe Government, under the act of June 15, 1917, is not to be measured by the profit that would have accrued under the contract, but must embrace that value which was taken from tbe contractor by tbe termination of tbe contract. Tbe contractor is to be credited with bis outlays reasonably made for tbe fulfillment of tbe contract.
    3. In this case, where tbe obligation of tbe contractor was to manufacture and furnish to tbe Government a definite quantity of xylol monthly, up to a specified amount, in a plant which was to be erected by tbe contractor with Government funds and belong to tbe Government, just compensation, upon cancellation of tbe contract, must include what tbe contractor expended on the plant in excess of tbe cost as estimated and adopted in tbe contract and paid by tbe Government, in so far as such additional expenditure was required to fit tbe plant for production of the xylol as the contract contemplated.
   Mr. Chief Justice Taet

delivered the opinion of the Supreme Court February 21, 1927.