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United States v. United Engineering Co., 234 U.S. 236 (1914)

United States v. United Engineering

& Contracting Company

No. 381

Submitted May 8, 1914

Decided June 8, 1914

234 U.S. 236


While reasonable contracts for liquidated damages for delay are not to be regarded as penalties and may be enforced between the parties, Sun Printing Assn. v. Moore, 183 U. S. 642, one party must not prevent the other party from completing the work in time, and if such is the case, even if the subsequent delay is the fault of the latter, the original contract cannot be insisted upon, and the liquidated damages are waived.

Where the original contract for government work provided for liquidated damages for delay beyond a specified date but supplemental contracts contained no fixed rule for the time of completion, the government is limited in its recovery to the actual damages sustained by reason of the delay for which the contractor was responsible.

It is the English rule, as well as the rule in some of the states, that where both parties are responsible for delays beyond the fixed date, the obligation for liquidated damages is annulled, and unless there was a provision substituting a new date, the recovery for subsequent delay is limited to the actual loss sustained.

Where the government has, by its own fault, prevented performance of the contract, and thereby waived the stipulation as to liquidated damages, it cannot insist upon it as a rule of damages because it may be impracticable to prove actual damages.

47 Ct.Cl. 489 affirmed.

The facts, which involve the construction of a contract for government work and the rights and obligations of

Page 234 U. S. 237

the government and the contractor thereunder, are stated in the opinion.

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