Eric:

(1) My feelings aren't hurt; really, it's okay, Man.

(2) Huh?

(3) I love ya, Man.

By Eric Ottinger on Tuesday, April 11, 2000 - 05:57 pm:

Vern,

As usual I am sorry that your feelings are hurt. Please energize a competent Juris Doctor or a competent grammarian to continue this thread if you wish to see it continued.

If I say, “John, who is my brother-in-law, who is my tenant, shovels the walk….” One might conclude that John is my brother-in-law, and one might conclude that John lives in the basement. You wouldn’t conclude that John is a shovel. There is no entity called “a release”, in the standard boilerplate release.

Whether the Congress and the Courts are careless or loose in their choice of words, I will leave to the constant reader.

This thread was a distraction tacked onto another thread, which was going off into the unproductively hypothetical. I think we have all been “practicing law without a license.”

As usual on these treasure hunts, I have learned a few things along the way. Courtesy of CON 210 I know that equitable adjustment is a murky and contentious issue. This will keep me from being dogmatic in the future. I will distinguish “equitable adjustment” which is what we do under the “Changes” clause, from “equitable” adjustment which is an adjustment based on the principles of equity law. (Or so I conclude, until I get better advice from Counsel.)

By the way, I am not particularly liberal on usage issues. I don’t like to see “impact” used as a verb and it really grates when “currency” is used to indicate that something is current or up to date. (The AF uses “recency” which has the minor advantage that it is in the dictionary. I don’t think you will see “recency” used much anywhere else.) However, I don’t have any particular urge to be constantly correcting my colleagues on this kind of issue.

By the time my daughter is my age, I am sure that the use of “impact” as a verb will be standard English. The use of currency to mean something other than lucre will go away, I hope, because it is unnecessary as well as ugly. So it goes.

Regards to all,

Eric

By Vern Edwards on Thursday, April 6, 2000 - 03:17 am:

Eric:

"In consideration of... the contractor hereby releases..." It seems clear enough to me: the contractor's release is the consideration given in return for the modification.

Your point seems to be that words mean whatever the user says they mean and that people who won't accept a user's definition are dogmatic and inflexible. I understand you.

My point is that consideration and equitable adjustment are different concepts and we should not let the various usages that we encounter confuse us about the differences. Since you say that nobody really disagrees with me, my work here is done.

By Ramon Jackson on Wednesday, April 5, 2000 - 07:19 pm:

Eric,

Got me going?! I merely observed that English is a rich language with many words having multiple acceptable, even authoratative, meanings further shaded by individual or group experience and that a documented resolution within the specific context before setting off expending significant money or effort is likely to save in the long run. Vern innocently offered an opportunity to explore an example -- actually a rather simple one unless we wish to extend into the origins of French royal titles.

Assumption, even within a specific environment, that everyone knows what is meant is so often the cause of later difficulties. Those who recognize the problem will more eagerly make use of RFI "proof reading," encourage questioning, spend time on further definition at kick off and use those other tools that assist in smoothly moving toward a goal vice swirling and offering opportunity to those who obstruct by redefining terms of reference by word play.

Ramon

By Eric Ottinger on Wednesday, April 5, 2000 - 12:22 pm:

Ramon,

If I can respond more exactly to your point. Of course, usage is a more authoritative guide than a dictionary definition. And, of course, the usage of the best writers and the acknowledged experts in any particular field is going to take precedence over common or casual usage.

I’m sure that Black’s Law Dictionary is a fine authority, but I doubt that it ever takes precedence over the most authoritative case law. Similarly, lexicographers are constantly collecting instances of current usage.

Unfortunately, much of the training and education in our field encourages inexperienced 1102’s to be dogmatic and inflexible. (Or, maybe. dogmatic and inflexible people select our career field.)

I remember a very unpleasant encounter with a young woman who was convinced that I was greatly in error when I referred in writing to “selection criteria.” As far as she was concerned, these were “factors,” and she wasn’t going to give any encouragement to my obvious ignorance and stupidity.

She wasn’t stupid and she wasn’t badly trained. In fact, she was highly intelligent, very capable, and well trained. And that is what is frightening.

Eric

By Eric Ottinger on Wednesday, April 5, 2000 - 11:38 am:

Ramon,

I’m not quite sure what I said that got you going, but of course, I agree. Now, we all know why Mahi Mahi is so popular. Nobody wants the kids to think that they are eating Flipper.

I think the Bible, or at least some interpreters, characterize Jonah’s whale as a fish. Vern’s point was cogent but just a little off target.

Eric

By Ramon Jackson on Wednesday, April 5, 2000 - 11:08 am:

Eric,

The point I was trying to make is that the English language is so rich in usages and shadings for words that we often run into difficulties even when using dictionary definitions.

A great deal of the baggage (not used in a negative sense) we bring with a word is based on unique experience. We have some fun with that in things like these discussions, but when negotiating or seeking common agreement for actual work I believe some time resolving those understanding gaps is time saved.

In one case we had the assembled contractor team and program office team to go through each line of the specifications together. The Contractor would take a line and tell us what it meant. In a number of cases that was a "What?" from us that turned out to be perfectly logical from the contractor's experience. We resolved experience with the terminology while I recorded the resolution on a laptop. We were able to then process an RFC to the specification that precisely defined the common understanding. It saved quite a few discussions later and I believe assisted understanding by new team members as we'd ironed out areas of possible different, but legitimate, understandings.

We hope wider context provides definitional support, but sometimes we assume too much. Strange things can happen when we fail to recognize that what we meant does not necessarialy click in the same way with others. If I use "tie to the dolphin" in a nautical sense I might think I'm perfectly clear in meaning "tie the vessel to the spar or bouy" (pure nautical use) while my contractor, experienced in another marine field, wonders how he is going to catch one of those animals for us to tie up to.

Ramon

By Eric Ottinger on Wednesday, April 5, 2000 - 09:35 am:

Kudos to Ramon for enlightenment in things ichthyological. I’m sure Vern knows the difference and he meant to write “whales” but wrote “dolphins” by some slip of the pen.

Since the definition which Vern considers loose is supported by authoritative dictionary definitions and numerous cites from Congress, Courts and Boards, I am not inclined to think that there is anything careless or loose in the usage.

The Merriam Webster Dictionary has an “a)” definition for “consideration” which is simply “payment” or “recompense.” The “b)” definition (presumably the more restrictive, more technical, definition) is the same as Vern’s definition.

I am comfortable using the “a)” definition and so, apparently, are Congress and the Courts. The “a)” definition is broad enough that it encompasses “equitable adjustment.”

The Cornell Law School Legal Information Institute defines “adequate consideration” as follows--

“To be legally binding as a contract a promise must be exchanged for adequate consideration. Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the promise/contract”

( http://www.law.cornell.edu/ )

Cornell can distinguish the definition from the context. What consideration “is” (i.e. benefit or detriment) is not the same thing as what it “does” (i.e. it must be exchanged).

(Vern:) “The language of the standard release cannot support the argument that the equitable adjustment is consideration for the change. Read it. It says that the contractor's release is the consideration for the adjustment.”

Vern, I did read the standard release. It says—As consideration (i.e. payment) for the modification, which is the equitable adjustment for the Contractor’s proposal, the Contractor hereby RELEASES …

“In consideration of the modification(s) agreed to herein as complete equitable adjustments for the Contractor’s __________(describe) __________“proposal(s) for adjustment,” the Contractor hereby releases the Government from any and all liability under this contract for further equitable adjustments attributable to such facts or circumstances giving rise to the “proposal(s) for adjustment” (except for __________).”

“Releases” is a verb, not a noun, in this sentence. To the best of my knowledge, there is no way in the English language to equate a noun (i.e. consideration) with a verb (i.e. releases). Please, go back, read carefully, and explain how you concluded that the release is the consideration.

Cornell led me to --

41 U.S.C. Sec. 117. Defective, informal, and quasi contracts

b) Technical defects or omissions

“Whenever any formal or technical defect or omission in any prime contract, or in any grant of authority to an officer or agent of a contracting agency who ordered any materials, services, and facilities might invalidate the contract or commitment, the contracting agency (1) shall not take advantage of such defect or omission; (2) shall amend, confirm, or ratify such contract or commitment without consideration in order to cure such defect or omission; and (3) shall make a fair settlement of any obligation thereby created or incurred by such agency, whether expressed or implied, in fact or in law, or in the nature of an implied or quasi contract.”

We go from a defective contract, which is not binding, to a binding contract and do it without “consideration.”

Now this “consideration” is clearly not the consideration needed to make the contract binding (which was not binding before.) In fact, it is the “without” consideration. I think this “consideration” (which we do without) is simply a quid for a quo, nor more, no less.

(Vern:) “ In the case of services, if nonconforming services cannot be reperformed, the government may reduce the price or fee to reflect the "reduced value" of the services. This does not entail accepting them; AND REDUCTION TO REFLECT "REDUCED VALUE" IS NOT THE SAME AS EQUITABLE ADJUSTMENT.

Since acceptance of nonconforming supplies or services is not covered by a contract clause, it would be a new promise that would have to be supported by consideration, such as a price reduction or some other quid pro quo.”

OK Vern, you’ve got me confused. The FAR specifically talks about an “equitable adjustment” “for the nonconforming services.”

FAR 46.407: “For services, the contracting officer can consider identifying the value of the individual work requirements or tasks (subdivisions) that may be subject to price or fee reduction. This value may be used to determine an EQUITABLE ADJUSTMENT for nonconforming services…”

Once more. Nobody really disagrees with the distinction that Vern and John have made. Along with Congress and many Judges I will continue to use the term “consideration” to mean simply a quid for a quo, no more and no less. If a real Juris Doctor wants to comment on this issue, I will be interested in what he/she has to say.

Eric

By Ramon Jackson on Tuesday, April 4, 2000 - 09:53 pm:

Vern,

You've also identified a problem, though I'd guess purely by accident, in saying "some people call dolphins 'fish'" in the "consideration" discussion. Some do -- accurately -- as it is a widely and long used common name for the small toothed whales (mammals) and a very beautiful blue, green, and gold oceanic fish found in warm waters. The latter is Dorado (some Latin America) or Mahi Mahi (Hawaii) and commonly served (with Florida restaurants widely adopting the other two names after incidents of wailing children thinking "Flipper" was on the menu). Even marine scientist can be found using the common terms, but not in professional papers.

I don't care to count the hours lost in enthusiastic discussions to outright arguments that were based on two word usages, both correct within a particular experience or discipline, but where only one applied to the case at hand. More than a few involved contracts or developments.

People don't like to do it, sometimes resent it, but careful term definition for important matters is required. So is rapid identification of when two usages are causing problems and recognition that agreement on terms must be in advance to real progress.

Ramon

By Vern Edwards on Tuesday, April 4, 2000 - 03:07 pm:

Peggy:

I agree with you (and Joel) that a court would enforce the clause. Parties to a contract do not need to exchange new consideration when they comply with the terms of their contract, including the terms of the changes clause.

Compliance with change orders and providing equitable adjustments when required are covered by the original consideration; the parties do not need to exchange new consideration when they do what the contract requires of them. Making an equitable adjustment when required is an element of contract performance, like requesting consent to subcontract when required.

Entitlement to an equitable adjustment is based on what is called a condition precedent -- that if the change causes a change in the cost or time of performance, then the parties will adjust the price or time in an amount equal to the amount of the change. The condition is part of the contract at the time of award and compliance with it entails no new promises, thus no new consideration.

Eric has shown us, and I acknowledge, that contracting parties and even judges use terms like consideration and equitable adjustment loosely and in ways that are not always consistent with the legal concepts that they represent. We have to accept that, but we should not allow such loose usages to confuse us about the true nature of those legal concepts.

Some people call all forms of negotiated settlements "equitable adjustments"; some people call equitable adjustments "consideration"; and some people call dolphins "fish." But saying it don't make it so. That's the only point I'm trying to make.

Peggy, I had worked up a response to the hypothetical contract requirement but it got lost in a tornado drill, yesterday.....

I believe that a court would uphold the clause, unless the seller could prove that the clause was "unconscionable", which is apparently rare. More likely to be used against the seller than against the buyer - in cases of excessively hard bargaining by a seller at the expense of a small buyer with weak purchasing power, for example. Court's don't generally consider the wisdom of the contract or the adequacy of the consideration to determine validity. Fraudulent inducement is another exception to the above. Happy Sails! Joel

By Peggy Richter on Tuesday, April 4, 2000 - 11:30 am:

By Vern Edwards: Peggy: Suppose that two parties negotiate a $1,000,000 firm-fixed-price act and agree to include the following clause among its
terms: (b) The seller agrees to comply with such orders at no additional cost to the buyer.
Now suppose that the buyer issues a written order that changes the drawings within scope, and that the change will cost the seller $10,000. Suppose further that the seller refuses to comply
with the buyer's order because doing that would shift value to the buyer without compensating the seller. Do you think that a court would refuse to enforce that clause because it doesn't require the buyer to provide the seller with an equitable
adjustment?
== No. I think the court would enforce it. HOWEVER you have added the following to the standard clause: (b) The seller agrees to comply with such orders at no additional cost to the buyer. Now if a contractor is silly enough to SIGN a contract with that in there, then they have in fact agreed that the change you suggest is covered by the initial quid pro quo (value for value received). In other words, NO CHANGE has actually occurred in the agreement. Now in a STANDARD Changes clause (i.e. one without that (b) The seller agrees to comply with such orders at no additional cost to the buyer.), if you make a change in the drawings and it changes the required manufacture EITHER UP OR DOWN, then yes, you are required to do a value for value received adjustment. The difference is that in the ONE contract you have this covered in the initial agreement and in the other you don't. It's still value for value received.
As to enforcement in a court of law, I suspect that if someone did use such terminology and the contractor felt the change was too big a change in value and there was enough $ involved, then they'd probably take that OTHER route for redress - go to their congressman and the news media. And of course if they were a big enough contractor, they would remember the fairness of this deal (generic term, not a legal one) the next time the Government went to deal with them. That isn't something generally talked about in contracting classes nor is it a "legal" issue - but strangely enough, contractors (and government contracts folk - it goes both ways) tend to remember if you "stiff" them, regardless if it was legal or not.
And this underlies something that IMO isn't covered by contractual law or court cases, but is based on plain ordinary "horse trading" - people (and companies) remember if you deal fairly with them or not and if you expect to ultimately do the best job possible for the public as a Government employee then your best bet is to be fair (not to always agree with the other party) and if you expect to ultimately do the best job possible for your company then your best bet is to be fair (not to always agree with the other party). Long term, your best bargains are based on mutual benefit not each side trying forever to see if they can "pull one over" the other guy.

By Vern Edwards on Tuesday, April 4, 2000 - 07:16 am:

Eric:

When you get a chance, check out the Uniform Commercial Code, Sec. 2-209(1).

By Vern Edwards on Monday, April 3, 2000 - 11:54 pm:

Eric:

One more thing: The cases you cited dealt with matters of accord and satisfaction. Accord and satisfaction is not the same as an equitable adjustment under a contract clause. An accord and satisfaction is a settlement in which a party accepts less than that to which it was entitled. Quoting from one of your quotes: "An accord is an agreement by one party to give or perform and by the other party to accept, in settlement or satisfaction of any existing or matured claim, something other than that which is claimed to be due." Underlining added. And from another: "Discharge by accord and satisfaction means a discharge by the rendering of some performance different from that which was claimed as due and the acceptance of such substituted performance by the claimant as full satisfaction of his claim." Underlining added.

Unlike an equitable adjustment under a contract clause, an accord and satisfaction is a new promise that must be supported by consideration. (Did you look up accord and satisfaction in your Webster's? What did it say? Did you check a professional's dictionary, like Black's?)

For instance, the Pacific Ship Repair case that you cited dealt with bilateral modifications which settled claims based on defective specifications, not with change orders issued pursuant to a changes clause. It would be appropriate to use the word consideration in such cases, since the contractor's performance was not required by a clause that was already supported by adequate consideration.

In the case of nonconforming supplies or services, acceptance of such supplies or services would require consideration, since, despite FAR 46.407, the FAR inspection clauses make no provision for such acceptance. Read them, they speak only of rejection and removal, replacement, or correction. In the case of services, if nonconforming services cannot be reperformed, the government may reduce the price or fee to reflect the "reduced value" of the services. This does not entail accepting them; and reduction to reflect "reduced value" is not the same as equitable adjustment.

Since acceptance of nonconforming supplies or services is not covered by a contract clause, it would be a new promise that would have to be supported by consideration, such as a price reduction or some other quid pro quo.

By Vern Edwards on Monday, April 3, 2000 - 10:37 pm:

Eric:

The language of the standard release cannot support the argument that the equitable adjustment is consideration for the change. Read it. It says that the contractor's release is the consideration for the adjustment.

By Eric Ottinger on Monday, April 3, 2000 - 06:50 pm:

The standard release WAS the most cogent argument. However, the ASBCA has provided a more cogent argument.

See “Pacific Ship Repair & Fabrication, Inc.”

http://www.law.gwu.edu/asbca/decis00.htm


“’The essential elements of an effective accord and satisfaction are proper subject matter, competent parties, meeting of the minds of the parties, and CONSIDERATION.

Emerson-Sack-Warner Corp., v. United States, 416 F.2d 1335, 189 Ct. Cl. 264, 277-78 (1969).

This record shows that 23 bilateral JO modifications, executed from 22 March to 23 November 1994, EQUITABLY ADJUSTED 31 change orders (“price proposals”) to correct defective LSWE specifications, which constituted a proper subject matter. Those modifications were agreed upon by competent parties and were supported by $1,345,822 CONSIDERATION. Each such modification identified by number the “price proposals” which it equitably adjusted. Each “price proposal” identified by number PSRF’s IDRs, if any, that gave rise to each “price proposal.” Each IDR identified the constructive change arising from the defective LSWE specifications and drawings. (Finding 21) Mayfair Const. Co./Capital Communications Corp., A Joint Venture, NASA BCA No. 578-12, 80-1 BCA 14,440 at 71,192 (amendments referred to changes directly traceable to RFIs; thus, pre-change order claims were discharged). Respondent prima facie established the four elements of accord and satisfaction.”

If you put “accord and satisfaction” into a search engine you will get numerous other hits.

LBCA, GOV-CONT 89,012 , Brero Construction, Inc., (Sep. 29, 1999)
Modifications--Bar to Claims--Consideration. A modification settling change order proposals was supported by adequate consideration, despite the fact that no additional costs were allowed for one of the change orders, because the modification, taken as a whole, was an accord and satisfaction. The modification settled 71 change order proposals and listed each separately with the amount to be paid for each. The contractor argued that because no amount was paid for the disputed change order proposal, no consideration existed for an accord and satisfaction. This argument was rejected, however, because the modification settled the claims on a lump sum basis, providing the necessary consideration.

US-FED-CLAIMS, 38 CCF 76,430 , CYR Construction Company v. The United States, (Nov. 18, 1992)

Accord and satisfaction refers to a method to discharge and terminate existing rights. It provides a perfect defense in an action for enforcement of a previous claim, whether that claim was well founded or not. An accord is an agreement by one party to give or perform and by the other party to accept, in settlement or satisfaction of any existing or matured claim, something other than that which is claimed to be due. The process of making an accord is the same as in the case of other contracts.

The following elements are essential to an accord and satisfaction: (1) proper subject matter; (2) competent parties; (3) resolution of a bona fide dispute between the parties; (4) meeting of the minds of the parties; and (5) consideration.

US-CL-CT, 35 CCF 75,616 , King Fisher Marine Service, Inc. v. The United States., (Jan. 24, 1989)
C. Accord and Satisfaction

The doctrine of accord and satisfaction operates to discharge or terminate an existing right. See Chesapeake & Potomac Telephone Co. v. United States [23 CCF 81,488], 228 Ct.Cl. 101, 654 F.2d 711 (1981) (citing 6 Corbin on Contracts §1276 (1962)). “Discharge by accord and satisfaction ‘means a discharge by the rendering of some performance different from that which was claimed as due and the acceptance of such substituted performance by the claimant as full satisfaction of his claim.'” Brock & Blevins Co. v. United States [10 CCF 72,981], 170 Ct.Cl. 52, 343 F.2d 951 (1965) (quoting Corbin, supra, §1276). The operative elements of an accord and satisfaction are as follows: “Proper subject matter, competent parties, meeting of the minds of the parties, and consideration ... [and acceptance] of payment or performance in satisfaction of a claim or demand which is a bona fide dispute.” Nevada Half Moon Mining Co. v. Combined Metals Reduction Co., 176 F.2d 73, 76 (10th Cir. 1949), quoted in Brock & Blevins, 170 Ct.Cl. at 59, 343 F.2d at 955.

Getting back to the standard release, I said “most cogent” because I doubt there is anything casual or accidental in the standard release. I trust that it was written with the help of highly competent legal counsel.

With a little help from my trusty “Webster’s,” I read the standard release as follows:

In consideration of [as payment or recompense for] the modification(s) agreed to herein [to serve] as complete equitable adjustments for the Contractor’s __________(describe) __________“proposal(s) for adjustment,” the Contractor hereby releases the Government from any and all liability under this contract for further equitable adjustments attributable to such facts or circumstances giving rise to the “proposal(s) for adjustment” (except for __________).

The “equitable adjustment” is clearly the “payment”, the “recompense” and the “consideration”.

However, let’s not go off on a single tangent.

FAR 46.407 “Nonconforming supplies or services” uses the terms “equitable price reduction,” “other consideration” and “equitable adjustment” to describe the recompense for the contractor’s non-conformance. Is this a careless or merely casual usage?

In FOGARTY, TRUSTEE v. U. S. the Supreme Court talks about modifications “without regard to consideration.”

At what point in this scenario would the validity or enforceability of the contract ever have been an issue?

Similarly, Congress allowed us incorporate FASA clauses without consideration. As far as I can tell these contracts remained valid and enforceable at all points throughout this process. Did I miss something?

Joel,

You may be right. But, if so, the ASBCA made a vulgar error characterizing the $1,345,822 as “consideration.”

If we follow your logic, I think we would have to say that there is a distinct element of consideration for each of numerous clauses in the contract. Maybe, but I doubt it.

Eric

By Vern Edwards on Monday, April 3, 2000 - 05:40 pm:

Joel:

Yes, we are in agreement.

However, allow me to suggest that there is nothing to be gained by saying that consideration and equitable adjustment are "related." That doesn't help people to understand the important distinction between the concepts and only leads to more questions, such as, in what way(s) are they "related."

Consideration is something given in exchange for something else in order to seal a bargain. An equitable adjustment is compensation for the impact of an act or omission that is due because certain contract clauses require such compensation in certain circumstances; it is not needed and does not serve to seal a bargain.

It often happens that consideration and equitable adjustment are both about money, consideration often taking the form of a promise to pay and equitable adjustment often taking the form of a change in the stipulated amount of a payment. But except for the fact that sometimes they are both about payment, they are different concepts, because they serve different purposes.

By joel hoffman on Monday, April 3, 2000 - 01:15 pm:

Vern, I 've been on vacation, so haven't closely followed this thread.

I thought I put it simply in my "March 24, 3:37 P.M." post.

In a bilateral contract, each party makes (a) promise(s) to the other. The promise which one party makes to is consideration for the promise made by the other.

When the contract was formed, both parties accepted the terms of the various clauses. In the Changes Clause, for example, the Government promised to make an equitable adjustment to the contract price, the delivery schedule, or both - if a change order will increase or decrease the Contractor's cost and/or schedule - and if the Contractor properly notifies the Government, etc., etc. By accepting this term of the RFP or IFB and executing the original contract offer or the contract form, the Contractor promised it will perform the change, when directed to proceed with it.

Thus, the Government's PROMISE of an equitable adjustment when appropriate because the Contractor promised to perform the change by accepting the contract clause, was the Government's consideration. Yes, we can distinguish this PROMISE from the actual equitable adjustment - the $$$ money or time extension.

I'll admit I was originally confused as to whether the PROMISE or the actual EQUITABLE ADJUSTMENT is "consideration". I'm now pretty certain that the PROMISE to provide an equitable adjustment is the "consideration".

Thus, you are correct that no additional "consideration" is required to make the parties perform the change or to provide the adjustment. Performance and payment are matters of discharging existing obligations. My point is that consideration and equitable adjustments are related. With those distinctions made between consideration and equitable adjustments, are we in agreement, now? Happy Sails! Joel

By Vern Edwards on Thursday, March 30, 2000 - 03:26 pm:

Peggy:

Suppose that two parties negotiate a $1,000,000 firm-fixed-price contract and agree to include the following clause among its terms:

CHANGES

(a) The buyer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:

(1) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the buyer in accordance with the drawings, designs, or specifications.

(2) Method of shipping or packing.

(3) Place of delivery.

(b) The seller agrees to comply with such orders at no additional cost to the buyer.

End of Clause

Now suppose that the buyer issues a written order that changes the drawings within scope, and that the change will cost the seller $10,000. Suppose further that the seller refuses to comply with the buyer's order because doing that would shift value to the buyer without compensating the seller. Do you think that a court would refuse to enforce that clause because it doesn't require the buyer to provide the seller with an equitable adjustment?

Please note that I'm not asking whether such a clause would be fair or good business practice. I'm just asking whether the clause would be enforceable in court