
    MARYLAND STEEL COMPANY v. THE UNITED STATES.
    [48 C. Cls., 50; 235 U. S., 451.]
    
      On the Plaintiff's Appeal.
    
    The time limit in a contract for the construction of a steamer is orally waived by the Quartermaster General before the expiration of the time fixed by the contract. The contractors complete the work and are paid the contract price, no deduction being made for delay, and the transaction is apparently closed. Four years afterward the defendants deduct from money due to the claimants upon another contract for other and distinct services the liquidated damages prescribed by the former contract for the days which exceeded the time limit. This deduction is now asserted by way of counterclaim in this suit.
    The court below decides:
    I.The waiver of the time limit of a contract may be verbal, i. e., not in writing, though the contract is required to be in writing by the act of June 2, 1862, Revised, Statutes, sec. 3744.
    II.Where time being of the essence of the contract, a contractor fails to perform within the stipulated time, permission to continue performance will operate as a waiver of his breach and will concede to him a reasonable time within which to complete the work, but will not operate as a waiver of the liquidated damages prescribed by the contract.
    III. Where it is the fault of the employer which causes the delay of the contractor, it will nullify the provision for liquidated damages and will leave the contractor liable, if at all, for actual damages only. But where the fault is that of the contractor alone the waiver of the time limit by the employer does not relieve the contractor from the payment of the agreed damages for his delay. It simply permits him to continue to perform for a reasonable time, subject to all the other provisions of the contract. The distinction between this case and United Engineering and Contracting Oo.’s case, 47 O. Ols. K., 489, shown.
    IV. Where there is neither concession nor compromise and the one party pays and the other accepts the exact amount due, it is not a payment in accord and satisfaction.
    V.Where the Government was entitled to deduct liquidated damages because of the contractors’ failure to perform within the time limit of the contract, and its officers failed to make the de- . duetion on the final settlement, the Government may bring a cross action therefor by way of counterclaim in a subsequent and distinct action.
   The court below is reversed and cause remanded with direction to dismiss the counter claim, of the Government and to enter judgment for appellant in the amount claimed by it.

Mr. Justice McKeNNA delivered the opinion of the Supreme Court January 5, 1915.  