United States v. H. H. Reisman

The United States filed suit in district court seeking actual damages for defendant Reisman’s breach of a contract to purchase chromite ore, following a Board of Contract Appeals ruling that the liquidated damages provision was unenforceable. The District Court for the Central District of California dismissed the complaint and the United States appealed. We reverse and remand.

Jurisdiction is based on 28 U.S.C. § 1291 .

I.

Factual Background.

This is a government contracts case in which the central issue is the availability to the government of a remedy in court for the total breach of the contract by the other party thereto.

The contract came into existence on August 14, 1970 when the defendant Reisman agreed to purchase from the General Services Administration (GSA) 803,527 tons of metallurgical grade chromite ore. The contract required that Reisman furnish to GSA an irrevocable sight commercial letter of credit for the full amount of the purchase price by August 24, 1970. Reisman failed to meet this deadline and obtained time extensions from the contracting officer on August 24, 1970 and August 27, 1970. The extension of August 27 expired on September 2, 1970. Again…