means are contemplated or used in their execution. The law looks to the general tendency of such agreements; and it closes the door to temptation, by refusing them recognition in any of the courts of the country.' 69 U.S. at pages 55, 56.
The second category of cases relied upon by the defendant concerns contracts the purpose of which was the performance of an illegal act or where the consideration in whole or in part was illegal, Auditorium Kennel Club v. Atlantic City, 199 A. 908, 16 N.J.Misc. 354 (Sup. Ct. 1938) (a lease contemplating use of premises for dog racing, an illegal activity under New Jersey law).
The third category of cases advanced by the defendant involves agreements for collusive bidding on government contracts, Brooks v. Cooper, 50 N.J.Eq. 761, 26 A. 978, 21 L.R.A. 617 (N. & A. 1893); Gulick v. Ward, 10 N.J.L. 87 (Sup. Ct. 1828). The latter case involved a contract which provided that the plaintiff would forbear from submitting an offer to the government to carry mail over a certain route provided that if the defendant received the government mail contract he would pay the plaintiff $ 1,000. The court held this contract to be void as against public policy as its arrangement reducing the number of competitors tendering bids for a government contract would defeat the clear purpose of the statute requiring that contracts be given to the lowest bidder.
The contract in the present case, however, does not fall in any of these categories. It is not a contract by the defendant to pay the plaintiff for inducing a public official to act in a certain manner; it is not a contract to do an illegal act; and it is not a contract which contemplates collusive bidding on a public contract. It should be noted that the first and third categories of cases, upon which the defendant relies most heavily, involve agreements which directly impinge upon government activities. In the case at hand, the contract's only effect on the government was that ultimately the government was to buy the product of which defendant's goods were to be a component. Neither the defendant nor the plaintiff had any dealings with the United States on account of this contract, and therefore the profit accruing to the plaintiff was not to have been earned as a result of either inducing government action or interfering with the system of competitive bidding. This contract cannot, therefore, be declared void as against public policy on the basis of the precedents cited by the defendant.
It is quite possible that the plaintiff was to have received a very high profit on the sale of the parts, either because The Hoover Company agreed to pay too high a price or because the defendant quoted too low a price. Further proof would be required to establish this as a fact. Even if it were proved that the plaintiff was to have received a far greater profit than the defendants for a much smaller contribution, the defendant would nevertheless be bound by his agreement by the familiar rule that relative values of the consideration in a contract between business men dealing at arm's length without fraud will not affect the validity of the contract, The Coast National Bank v. Bloom, 113 N.J.L. 597, 174 A. 576, 95 A.L.R. 528 (E. & A. 1934); Restatement of the Law of Contracts Sec. 81 (1932).
The fact that the government is the ultimate purchaser of the product in which defendant's parts are used is cited by the defendant as a reason to hold that this contract is void as against public policy. To so hold would necessitate either ruling that all contracts are void if they provide for compensation for middlemen, such as Black Industries, between producer and purchaser of goods which ultimately are incorporated in products sold to the government, a result which is not supported by precedent and which would defy the realities of our economic life, or deciding in every case involving such a contract whether the compensation paid a middleman such as the plaintiff here who locates purchasers and assists the producer in other ways, is reasonable. This latter course would, in effect, impose price regulatory functions on the court. There are other and more effective methods of insuring that the government does not pay an unreasonable price for its supplies. The manufacturer selling directly to the United States must conform to procedures such as bidding designed to protect the government, and which should, in conjunction with the ordinary considerations of profits and loss, insure that prime contractors do not pay outlandish prices for the products they buy in order to fulfill a government contract. The contract may be subject to renegotiation. 50 U.S.C.A.Appendix, § 1211 et seq. I do not believe that it is the function of the court to interfere by determining the validity of a contract between ordinary business men on the basis of its beliefs as to the adequacy of the consideration. Consequently, I hold that, assuming the facts to be as stated by the defendant, the contract sued on in this case is not void as against public policy and the defendant's motion for a summary judgment will, therefore, be denied.
Let an order be submitted in accordance with this opinion.
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