Opinion ID: 318311
Heading Depth: 1
Heading Rank: 1

Heading: the nature of the charter agreement

Text: 2 In May 1966 the CCC issued by telephone and telegraph a general invitation to private enterprise to bid on the carriage of a large amount of foodstuffs from the United States to South Vietnam. The invitation to bid required that all offers be delivered either in person or by telephone. Acting through its agent Universal Shipping Corporation, ARL entered a bid. On 9 May 1966 oral agreement was reached with CCC's agent, the Ocean Transportation Division of the Foreign Agricultural Service of the U.S. Department of Agriculture. ARL proposed the SS Eviliz to transport the foodstuffs under charter to the U.S. Government. The oral agreement was subject to the terms of the telegraphed invitation to bid, and the USDA Grain Charter Party (1 March 1963 Revision). 2 On 11 May 1966 the parties orally agreed through their agents to allow ARL to substitute another ship for the SS Eviliz, which ARL had been unable to purchase. 3 ARL repudiated the oral agreement on 18 May 1966 and refused performance. However, ARL did offer by telegram to pay any extra storage charges until other carriage was obtained. This refusal of performance occurred before any written charter or contract had been signed. The failure of the agreement caused the Government additional storage, handling, and shipping costs, in the amount of $40,309.67. 4 In November 1971 the United States brought suit in District Court for the additional costs of $40,309.67 plus interest from May 1966. This dormant claim was thus revived 5 1/2 years after the oral agreement had been breached, and several months after ARL had won a suit against the Government in the U.S. District Court for the Eastern District of New York on an unrelated admiralty action in the amount of $43,421.00. 3 ARL answered the government complaint and sought a judgment on the pleadings, in part on the ground that the CCC could not enforce a government charter agreement made orally only. After denial of the motion by the District Court, ARL moved for reconsideration or alternatively certification of the oral contract question to the Court of Appeals for an interlocutory appeal. 4 The District Court did not grant the substantive motion but did grant certification. We allowed the appeal by order of 13 October 1972. 5 5