This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The United States is a government of limited powers, possessing only such as are expressly or impliedly conferred upon it by the Constitution of the United States. It has full power to contract when such contract is a suitable and appropriate method of carrying such powers into execution.1 The United States is liable for interfering with the work of a contractor,2 or for arbitrary and unreasonable conduct of its engineers,3 but not for damages for a delay not due the United States.4 The United States may be liable on an implied contract for office rent,5 or for use and occupation.6 Under claim of implied contract the United States cannot be held for infringement of a patent,7 or for damage on an elevator in postoffice buildpriority of payment of its own debts,19 and may set off damages for delay against the contract compensation.20 The legislative department may also provide directly for enforcing contracts. An appropriation made by Congress for paying a claim is final.21 In the absence of special restrictions the ordinary rules of contract law, such as the rules of commercial paper,22 apply to contracts with the United States; and Common-Law rules of evidence apply to actions thereon.23
1 Langford v. United States, 95 Fed. 933; United States v. Utz, 80 Fed. 848; Starin v. United States, 31 Ct. CI. 65; Myerle v. United States, 31 Ct. CI. 105; Haliday v. United States, 33 Ct. CI. 453; Gregory v. United States, 33 Ct. CI. 434; Salisbury v. United States, 28 Ct. C1. 52; Salisbury v. United States, 28 Ct. C1. 404.
2 Kelly v. United States, 31 Ct. C1. 361.
3 Collins v. United States, 35 Ct. C1. 122.
4 United States v. Bliss, 172 U. S. 321; Churchyard v. United States, 100 Fed. 920.
5 Swigett v. United States, 78 Fed. 456.
6 Clifford v. United States, 34 Ct. C1. 223.
7 Schillinger v. United States, 155 U. S. 163; Russell v. United States, 35 Ct. C1. 154. No implied contract to pay for a patent arises where patentor introduces it into public service, and pattern, working drawings and machines were paid for by the government. Gill v. United States, 160 U. S. 426. Though where the patent is used with the understanding that payment is to be made therefor an implied contract exists. United States v. Mfg. Co., 156 U. S. 552; Talbert v. United States, 25 Ct. C1. 141. A local postmaster cannot be enjoined from using a patented machine furing,8 or for fees voluntarily overpaid in by a consul-general,9 nor for attorneys' fees where the suit was brought in the name of the United States but the attorneys looked to their clients for their fees.10
The chief peculiarity of United States contracts is the practical difficulty in enforcing them against the government. From the very nature of a government, having no political superior, enforcing payment of its debts is war, actual or threatened. Permission to sue may be given by the state, either by general or by special statutes. The United States has established the Court of Claims and thus given permission to be sued therein on contracts,11 but not in a state court.12 The Court of Claims can also entertain actions against the United States in quasi-contracts; such as actions to recover payments illegally exacted by duress or compulsion of law.13 The statute creating the Court of Claims does not, however, change the nature of the liability of the United States. Payments made voluntarily cannot be recovered in this court.14 If the claim is not on contract the sole remedy is to appeal to Congress.15
The United States in giving permission to be sued may impose such conditions as it sees fit. In consenting to be sued, it may restrict the compensation of attorneys;16 or provide against any compensation ;17 or it may require claims to be paid direct to claimants and not to attorneys.18 It may provide for nished by the government as this is really an action against the United States. International, etc., Co. v. Bruce, 194 U. S. 601 (decided by a divided court).
8 Bigby v. United States, 103 Fed. 597.
9 United States v. Wilson, 168 U. S. 273.
10 Coleman v. United States, 152 U. S. 96.
11 See Court of Claims cases in this section.
12 Stanley v. Schwalby, 162 U. S. 255.
13 Swift Company v. United States, 111 U. S. 22; United States v. Ellsworth, 101 U. S. 170; United States v. Lawson, 101 U. S. 164.
14 United States v. Edmonston, 181 U. S. 500; United States v. Wilson, 168 U. S. 273.
15 German Bank v. United States, 148 U. S. 573.
16 Ball v. Halsell, 161 U. S. 72.
17 A statute that no part of money repaid to a state in refunding direct taxes shall go to an attorney binds the state and the agent or attorney of the state. Wailes v. Smith, 157 U. S. 271.
18 Spalding v. Vilas, 161 U. S. 483.
The United States has also provided that contractors cannot assign claims against the United States, and the allowance of such assignment by a disbursing officer gives it no validity.24 This prohibition does not apply to claims against officers, as to a claim against a post-office inspector for money seized by him but not then turned over to the postmaster-general,25 or drafts of deputies accepted by a marshal,26 nor does it apply to a pledge of a crop of sugar including the bounty,27 nor to a transfer by one partner to another of all the partnership property including such claim,28 nor to an assignment of a claim against the United States to a receiver ordered by a court of chancery,29 nor to the purchase of a claim sold in bankruptcy.30 This statute is solely for the protection of the government, and if the government sees fit to recognize the assignment31, or if the question arises solely between assignor and assignee,32 the assignment is valid.
19 State v. Foster, 5 Wyo. 199; 29 L. R. A. 226; 38 Pac. 926.
20 Satterlee v. United States, 30 Ct. C1. 31.
21 United States v. Louisville, 169 U. S. 249. Where New York borrowed from her canal fund to raise troops, a U. S. statute to repay the " costs, charges and expenses properly incurred" includes such loan and interest paid thereon. United States v. New York. 160 U. S. 598.
22 Wells Fargo & Co. v. United States. 45 Fed. 337.
23 Allen v. United States, 28 Ct. C1. 141.
24 Greenville Savings Bank v. Lawrence. 76 Fed. 545; 22 C. C. A. 646; U. S. Rev. St. Sec. 3477; Hitchcock v. United States, 27 Ct. C1. 185; Harris v. United States, 27 Ct. C1. 177.
25 United States v. Ferguson, 78 Fed. 103.
26 Douglas v. Wallace, 161 U. S. 346.
27 Barrow v. Milliken, 74 Fed. 612; 20 C. C. A. 559.
28 Jernegan v. Osborn, 155 Mass. 207; 39 N. E. 520.
29 Price v. Forrest, 173 U. S. 410; Redfield v. United States, 27 Ct. C1. 393; Price v. Forrest. 54 N. J. Eq. 669; 35 Atl. 1075; Forrest v. Price, 52 N. J. Eq. 16; 29 Atl. 215.
30 McKay v. United States, 27 Ct. C1. 422.
31 Hobbs v. McLean, 117 U. S.
So in claims where specified forms of assignment are required informality in assignment, though "absolutely void" by statute, does not invalidate it as between the parties, but the assignee may enforce his lien after payment by the government to the assignor.33