In a case dealing with contracts between the US Forest Service and plaintiff that provide for timber harvesting in a forest region of Arizona, the circuit court in Precision Pine & Timber Inc. v. US, No. 08-5092, dealt with the issue of whether the federal government's suspension of fourteen contracts breached any express or implied warranties.
In reversing the the trial court's judgment of liability and award of damages on all contracts except one, the court held that the trial court erred in construing a clause in question to create an express warranty and holding the Forest Service liable for misrepresentation. Thus, the court found that the Forest Service did not breach its implied duty of good faith and fair dealing in suspending the contracts to due concerns about Mexican spotted owls being listed on the endangered species list.
As for one contract, known as the Hay contract, the Court concluded that the Forest Service lacked the authority to suspend it, and thus, ordered that plaintiff be entitled to damages during the duration of the suspension.