Opinion ID: 207966
Heading Depth: 1
Heading Rank: 10

Heading: The Contract Provision Defense: Was the failure to perform excused by specific contract provisions?

Text: The two contract provisions that lie at the heart of this Government defense are Articles 9 and 12. Article 9 of the Stockton East contract, entitled Water Shortage and Apportionment, reads (with emphases added): 9. (a) In its operation of the Project, the United States will use all reasonable means to guard against a condition of shortage in the quantity of water available to the Contractor pursuant to this contract. Nevertheless, if a shortage does occur during any year because of drought, or other causes which, in the opinion of the Contracting Officer [i.e., the Secretary of the Interior or his duly authorized representative], are beyond the control of the United States, no liability shall accure [sic] against the United States or any of its officers, agents, or employees for any damage, direct or indirect, arising therefrom. (b) In any year that the Contracting Officer determines that there is a shortage in the quantity of water available to customers of the United States from the New Melones Unit of the Project, the Contracting Officer will apportion available water among the water users capable of receiving water from said Unit, consistent with the existing contracts and Project authorizations. During such water short years, the quantity of water available to the Contractor pursuant to the terms of this contract shall be reduced, as necessary, to meet the full needs of the Basin contractors and the needs of Central San Joaquin Water Conservation District for its firm and interim water supply.... [34] Article 12(d) governs determinations made by the parties under the contract: Where the terms of this contract provide for action to be based upon the opinion or determination of either party to this contract, whether or not stated to be conclusive, said terms shall not be construed as permitting such action to be predicated upon arbitrary, capricious, or unreasonable opinions or determinations.