CONTRACTS WITH THE UNITED STATES

Authors

Grover C. Grismore, University of Michigan Law School

Abstract

It has been settled since a comparatively early day in the history of our government that "the United States being a body politic, may, within the sphere of the constitutional powers confided to it, and through the instrumentality of the proper department to which those powers are confided, enter into contracts not prohibited by law, and appropriate to the just exercise of those powers." While this proposition became established without much of a struggle, it has not been so freely admitted that such contracts are to be given the same construction and effect as the contracts of individuals. In Smoot's Case, Mr. Justice Miller said, "There is in a large class of cases coming before us from the court of claims a constant and ever recurring attempt to apply to contracts made by the government, and to give to its action under such contracts, a construction and an effect quite different from those which courts of justice are accustomed to apply to contracts between individuals." He was referring to efforts put forth on behalf of private contractors to prevent the application of the usual rules, to their detriment. An added impetus has been given to such attempts by reason of the unusual activity of the government during the World War and of the abnormal economic conditions accompanying it. That they are not confined alone to private contractors seeking a measure of relief from losing bargains is apparent from an examination of recent cases and of the literature emanating from the office of the attorney general of the United States. In a memorandum written by a special assistant to the attorney general, dated November 27, 1922, and addressed to the attorney general and the advisory council, War Transaction Section, the theory is advanced that a contractor with the government is in the position of a trustee and can in no case become entitled to more than "just compensation" for benefits conferred upon the United States. A just apprehension that the war contractors were not always actuated by the highest motives, and that they took advantage of the confusion incident to operations on· a scale unprecedented, has led to these efforts on the part of the government to overhaul agreements previously entered into.

Recommended Citation

Grover C. Grismore, CONTRACTS WITH THE UNITED STATES, 22 Mich. L. Rev. 749 (1924).
Available at: https://repository.law.umich.edu/mlr/vol22/iss8/2