In the case of Peninsula Group Capital Corp. v. U.S., WL 3069581, August 6, 2010, the United States Court of Federal Claims dismissed a complaint filed against the United States for breach of a contract to transfer real estate. The Court found that no contract existed, and thus there could be no breach.
The Plaintiff and Department of the Army and United States Army Reserve conducted extensive negotiations in preparation for the transfer of the Aviation Support Facility located at the Orlando airport. Plaintiff expended large sums of money in furtherance of planning for the transaction. However, throughout the negotiation exchanges, both parties contemplated that the transaction would be the subject of a final written transfer agreement document. Ultimately, the plan was not consumated before intervening legislation changed the Army’s direction for the excess property.
The Court of Federal Claims has jurisdiction to hear cases pursuant to the Tucker Act, 28 USC 1491, which waives the government’s sovereign immunity for certain claims. Tucker Act jurisdiction includes claims founded on express or implied contracts with the United States.
A contract with the federal government requires offer, acceptance, and consideration, and someone with actual authority to bind the United States. In the case of an implied contract, a meeting of the minds and mutual intent to be bound is required. The court can infer a meeting of the minds by the conduct of the parties. In this case, the correpondence of the parties spanning several years contemplated that there would ultimately be a final written agreement executed by the parties. The Court found that no contract was ever entered into by the parties, so no breach of contract was possible, and dismissed the complaint.
Contact government contracts attorney Karen S. Hindson for more information.