Court Opinion

ID: 9420329
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:53:58.936795+00
Date Added: 2024-06-11T17:22:24.145096
License: Public Domain

Mr. Justice Douglas,
with whom
Mr. Justice Black, Mr. Justice Murphy, and Mr. Justice Rutledge agree, concurring.
It is clear and undisputed that the contract which the parties made was to .be reduced to formal terms. Both the “letter of intent”.1 and the “official award” 2 by their express terms state that a “formal contract” was contemplated. That circumstance raises difficulties for respondent which neither it nor the Court of Claims nor this Court’ has surmounted.
During the period of time relevant here, the Navy (apart from exceptions inapplicable to the type of contract involved in this case) had “standard termination clauses for fixed price contracts” which “in general form *215and substance” were inserted “in most contracts,” 3 They provided that in the event of cancellation “for the convenience of the Government” the contractor would-be paid “for all costs, including a proper allocation of overhead expenses to the contract, incurred up to the time of termination, plus an allowance of 6% or 7% profit on all such costs except purchases of materials and unfinished goods, for which the contractor was reimbursed at cost.” 4 *216That policy of the. Navy, revealed as it was in official communications to Congress, is a matter of which we can take judicial notice. We have heretofore amplified findings of facts by reports of the Secretary of War. Tempel v. United States, 248 U. S. 121, 130. . The official communications which disclose the policy of the Navy in this case, like reports, rules and regulations of agencies5 or other communications to Congress,6 are equally, reliable and authoritative and need no further proof.
Respondent, however,, has not carried the burden of showing that it would have been saved from the application of that policy. It has not shown that its contract falls in an exempt class. It has hot shown that what was usual or customary for other contracts of this type would not be written into the formalized agreement to which its contract with the Government was to be reduced.' It has not shown how it could escape application of the Navy’s general policy and be granted the favor of a contract without a termination clause.
Yet unless it can make that showing, it has not established by “clear and direct proof,” as United States v. Behan, 110 U. S. 338, 344, requires, that it would have been free to make the profits which it claims' as damages for breach of the contract. For the customary termination clause relieved the promisor of any liability for unearned profits of the- character claimed here. .Since respondent did not show that at least in all probability its contract would have been free of that provision, it failed at the threshold of the case to carry the burden which rested on it.

 The “official award” stated that the Navy’s acceptance of respondent’s proposal was authority to commence performance “without waiting for the formal contract.”

 Memorandum from James Forrestal, Under. Secretary of the Navy, Jan. 11, 1944, Senate Hearings on S. 1268, S. 1280, and S. J. Res. 80,78th Cong., 1st Sess., 551,553, where it is said:
“Standard termination clauses for fixed price contracts were developed late in 1941, and in general form and substance have been inserted in most contracts entered into since that time except for ship-construction contracts, which constitute a separate problem. The Department has not undertaken to modify outstanding contracts by the insertion of such clauses. It is difficult to estimate the time which would be required to incorporate such a clause by amendment in all contracts. However, it is doubted that such action would be administratively feasible except upon the initiative of the contractor.”
And see letter of the Acting Secretary, Oct. 10, 1943, id., 270-271.

 See record p. 177 in Pownall v. United States, 334 U. S. 742, and record p. 227 in Alexander Wool Combing Co. v. United States, 334 U. S. 742. And see H. R. Hearings on H. R. 3022, 78th Cong., 1st Sess. 27. At the time, Title II of the First War Powers Act, § 201, 55 Stat. 839, 50 U. S. C. App. § 611, was in effect empowering the President to authorize any department or agency exercising functions in connection with the prosecution of the war effort under regulations prescribed by him “to enter into contracts and into amendments or modifications of contracts heretofore or .hereafter made . . . without regard to the provisions of law relating to the making, performance, amendment, or modification of contracts whenever he deems such action would facilitate the prosecution of the war . . . .” By Executive Order 9001, dated Dec. 27,1941, 6 Fed. Reg. 6787, 3 C. F. R. Cum. Supp. 1054, the President delegated this authority to various agencies, including the Navy Department. He also authorized the Navy “by agreement” to modify or amend or settle “claims” under contracts and provided that the amendments and modifications “may be with or without consideration and may be utilized to accomplish the same things as any original contract could have accomplished hereunder, *216irrespective of the time or circumstances-pf the making of or the form' of the contract amended or modified, or of the amending or modifying contract, and irrespective of rights which may have accrued under the contract, or the amendments or modifications thereof,”

 See Lilly v. Grand Trunk R. Co., 317 U. S. 481, 488; Labor Board v. Atkins & Co., 331 U. S. 398, 406-407.

 See Ludecke v. Watkins, 335 U. S. 160, 166-170.