Court Opinion

ID: 8595611
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:02:46.758488+00
Date Added: 2024-06-11T16:54:54.694112
License: Public Domain

Bennett, Judge,
with whom Skelton, Judge, joins, concurring:
I concur with Judge Kashiwa’s opinion and in the decision reached, but find it necessary to discuss briefly one aspect of plaintiff’s rebuttal to the two affirmative defenses set up by defendant in this litigation. When faced with these defenses, plaintiff promptly asserted that its recovery could not be diminished to the extent of its assignor’s delinquent taxes or underpaid employee wages, because of the terms of the Assignment of Claims Act of 1940, as amended, 41 U.S.C. § 15 (1970) :
Any contract of * * * the General Services Administration * * * may, in time of war Or national emergency proclaimed by the President * * * or by Act or joint resolution of the Congress and until such war or national emergency has been terminated in such manner, provide or be amended without consideration to provide that payments to be made to the assignee of any moneys, due or to become due under such contract shall not be subject to reduction or set-off, and if such provision or one to the same general effect has been at any time heretofore or is hereafter included or inserted in any such contract, payments to be made thereafter to an assignee of any moneys due * * * shall not be subject to reduction or set-off for any liability of any nature of the assignor to the United States or any department or agency thereof which arises independently of such contract, * * * .
*351It should be noted that the statute confers discretion upon contracting agencies to include the appropriate language. A “no set-off” clause is not mandatory.
The record in this case does not include copies of the five contracts themselves which were assigned as security to this plaintiff, nor has plaintiff otherwise proved to my satisfaction that the contracts originally included the no set-off language which is authorized by él U.S.C. § 15 (1970). In fact, plaintiff implicitly concedes that no such provision originally appeared in any of the five contracts by arguing in its main brief that the provisions of the Act became operative through an implied contract amendment when it as assignee delivered copies of the assignments themselves to GSA. The instruments of assignments, which we do have before us, contain a warranty running from the assignor to plaintiff that no outstanding claims existed which might result in a set-off, reducing payments otherwise due the contractor.
Thus, plaintiff finds itself reduced to the position that each of these contracts was amended during the course of performance, so as to include by operation of law a provision binding against the Government that payments to be made to the assignee of moneys due or to become due the contractor would not be subject to reduction or set-off for the assignor’s liabilities to the United States or its agencies. Plaintiff finds such an amendment implied in fact from the following circumstances: (1) the instruments of assignment to it contained the contractor’s warranty that no indebtedness existed in favor of the United States; (2) the instruments were delivered to responsible officials at GSA; and (3) GSA acknowledged receipt of such instruments without exception.
I would go a step further than Judge Kashiwa’s opinion and hold as well that, as a matter of law, none of these five contracts were amended to contain a no set-off provision. In order to amend a contract, as in the case of contracting in the first instance, the parties by words or actions must manifest assent to the terms of the proposed bargain. Restatement, Contracts § 52 (1932)'; Restatement, Second Contracts § 52 (T.D. No. 1 (1964)). I do not think that we reasonably can say that authorized Government officials manifested their assent to the inclusion of a no set-off provision *352in these contracts. The Government did nothing more tba.n to acknowledge receipt of the papers embodying the various assignments. Such an acknowledgment alone on the- facts of this case is insufficient to conclude a legally effective amendment of a contract.
I agree that the petition should be dismissed.