FRANKFURTER, J., dissenting in part.

332 U.S.

patented machines in favor of a purchaser of its salt. If such was the intention of Paragraph VI, the District Court will want to convey such meaning less ambiguously.2

As the paragraph stands, I do not see how any lawyer would advise that the appellant could vary its prices among customers in different localities for a legitimate reason without each time going to the District Court for a modification of the decree. That is not a burden which, on this record, ought to be placed on the appellant. The undue sting of Paragraph VI is not saved by the fact that it is "specific." Of course it is in the interest of courts and of litigants that the terms of a decree be as specific as possible. But the desideratum of explicitness does not dispense with the requirement that remedies be appropriate to the condemned illegality. It does not draw the sting of undue prohibition of lawful conduct to make the prohibition specific.

2 See the clause which the appellant proposed to the District Court, enjoining it "from refusing to sell, lease or license the use of any such machine to any person, firm or corporation, or from discriminating in the terms of any contract of sale, lease or license of any such machine with any person, firm or corporation, against the prospective buyer, lessee or licensee on the ground that he has used or dealt in, or intends or proposes to use or deal in, salt not manufactured or sold by the defendant International Salt."

Syllabus.

PRIEBE & SONS, INC. v. UNITED STATES.

CERTIORARI TO THE COURT OF CLAIMS.

No. 16. Argued October 13, 1947.-Decided November 17, 1947.

1. Pursuant to a program for aiding England and Russia under the Lend-Lease Act of March 11, 1941, petitioner contracted to supply to the Federal Surplus Commodities Corporation a quantity of dried eggs. The contract specified "May 18 [1942] delivery," which date "shall be the first day of a 10-day period within which the FSCC will accept delivery, the particular day within the period being at the FSCC's option"; required petitioner to have the eggs inspected and that delivery be accompanied by inspection and weight certificates; and provided that "failure to have specified quantities of dried egg products inspected and ready for delivery by the date specified in the offer" would make operative a provision for "liquidated damages." It did not provide for notice to the Government when the shipments were ready. Inspection and certification, though not completed by May 18, were completed prior to the dates designated by the FSCC for deliveries; and petitioner made timely deliveries pursuant to instructions. Held: The provision for "liquidated damages" constituted a penalty and was not enforceable. Pp. 408–414.

2. The contract is construed to mean that the time for delivery by petitioner was not May 18, 1942, but the time or times chosen by the FSCC within the 10-day period which began on May 18; i. e., performance was not due until request was made and instructions given for delivery. P. 410.

3. Since the provision in question did not cover delays in deliveries, it could not possibly be a reasonable forecast of just compensation for damage caused by breach of contract. P. 412.

4. Congress did not expressly grant the power to impose penalties as sanctions to the program adopted pursuant to the Lend-Lease Act; and that power may not be implied. Pp. 413–414. 106 Ct. Cl. 789, 65 F. Supp. 457, reversed.

The Court of Claims dismissed petitioner's suit to recover sums alleged to be due upon a contract with the

Opinion of the Court.

332 U.S.

Government. 106 Ct. Cl. 789, 65 F. Supp. 457. This Court granted certiorari. 330 U. S. 815. Reversed, p.

414.

J. Arthur Miller and Allen H. Gardner argued the cause for petitioner. With them on the brief was Samuel Williston.

Philip Elman argued the cause for the United States. With him on the brief were Solicitor General Perlman, Assistant Attorney General Ford, Paul A. Sweeney and Melvin Richter.

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

This case, here on certiorari to the Court of Claims, presents the question whether a provision in a government contract for "liquidated damages," as construed and applied, should be denied enforcement on the ground that it constitutes a "penalty."

Shortly after the enactment of the Lend-Lease Act of March 11, 1941, 55 Stat. 31, 22 U. S. C. (Supp. V, 1946), § 411 et seq., the United States acting through agencies of the Department of Agriculture embarked on a program of purchasing dried eggs for shipment to England and Russia. Petitioner agreed to furnish a quantity of dried eggs under that program to the Federal Surplus Commodities Corporation (FSCC). The contract called for "May 18 [1942] delivery" which date, according to the contract, "shall be the first day of a 10-day period within which the FSCC will accept delivery, the particular day within the period being at the FSCC's option." Petitioner was also required to have the eggs inspected, delivery to be accompanied by inspection and weight certificates.

The contract contained two provisions respecting "liquidated damages." One, contained in paragraph 9, was

407

Opinion of the Court.

applicable to delays in delivery.' It has no application here, for as we shall see, deliveries were timely. The provision for "liquidated damages" with which we are concerned is contained in paragraph 7 and is applicable to a totally different situation. It provides, with exceptions not material here, that "failure to have specified quantities of dried egg products inspected and ready for delivery by the date specified in the offer" will be cause for payment of "liquidated damages." "

2

On May 18, 1942, petitioner had not made delivery nor had the eggs been inspected. Inspection was, however, completed and certificates issued by May 22, which was prior to the time when FSCC asked for delivery. For it was not until May 26 that FSCC gave the first of several written notices for the shipment of eggs involved in this litigation. Petitioner made timely shipments pursuant to those instructions. Subsequently FSCC ascer

1 That provision of the contract provided:

"Inasmuch as the failure of the vendor to deliver the quantity of the commodity or commodities specified in the contract in accordance with the terms of this announcement will, because of the urgent need for the commodity by the purchaser arising from the present emergent conditions, cause serious and substantial damages to the purchaser, and it will be difficult, if not impossible, to prove the amount of such damages, the vendor agrees to pay to the FSCC liquidated damages as stated in this paragraph. The sum is agreed upon as liquidated damages and not as a penalty and shall be in the amount set forth below for each pound of dried egg product undelivered in accordance with the terms of this announcement. . . . The parties have computed, estimated, and agreed upon this sum as an attempt to make a reasonable forecast of probable actual loss because of the difficulty of estimating with exactness the damages which result."

The "liquidated damages" ranged from 10 to 30 cents per pound dependent upon the elapsed time between the acceptance date and May 18, 1942.

2 The measure of "liquidated damages" in this situation was the same as that for delays in delivery set forth in note 1, supra.

Opinion of the Court.

332 U.S.

tained that petitioner's inspection certificates had been issued after May 18 and accordingly deducted from the price 10 cents per pound on the theory that the failure to have the eggs inspected and ready for delivery by May 18 was a default which put into operation the "liquidated damages" provision of the contract.

Petitioner brought this suit in the Court of Claims to recover the amounts withheld plus interest. The Court of Claims, being of the view that there had been a breach of contract for which the United States was entitled to "liquidated damages," dismissed the petition. 106 Ct. Cl. 789, 65 F. Supp. 457.

We construe the contract to mean that the time for delivery by petitioner was not May 18, 1942 but the time or times chosen by the FSCC within the ten-day period which began on May 18. That is to say, performance by petitioner was not due until request was made and instructions given for delivery. That interpretation is in accord with the uncontested finding of the Court of Claims that petitioner promised delivery "within a tenday period commencing May 18, the precise date to be selected" by the FSCC.

The contract was drawn, however, to make the "liquidated damages" provisions include so-called defaults of petitioner which antedated the time when delivery was due but which in no way interfered with or caused delay in that performance. As noted, "liquidated damages" became payable on "failure to have specified quantities of dried egg products inspected and ready for delivery by the date specified in the offer," viz. by May 18, 1942. The Court of Claims held this provision enforceable even though petitioner had made prompt delivery of the eggs, because it felt that the provision enabled respondent to carry on its dried-egg program "with assurance that it could count on the dried-egg products being ready on the specified date." That position is amplified by respond