Mobil Oil Exploration & Producing Southeast, Inc. v. United States, 530 U.S. 604, 18 (2000)

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Cite as: 530 U. S. 604 (2000)

Opinion of the Court

not at least buy a promise that the Government would not deviate significantly from those procedures and standards, then what did they buy? Cf. id., at 324 (the companies bought exclusive rights to explore and develop oil "if they met" OCSLA requirements (emphasis added)).

The Government's modification of the contract-incorporated processes was not technical or insubstantial. It did not announce an (OBPA-required) approval delay of a few days or weeks, but of 13 months minimum, and likely much longer. The delay turned out to be at least four years. And lengthy delays matter, particularly where several successive agency approvals are at stake. Whether an applicant approaches Commerce with an Interior Department approval already in hand can make a difference (as can failure to have obtained that earlier approval). Moreover, as we have pointed out, OBPA changed the contract-referenced procedures in several other ways as well. Supra, at 619.

The upshot is that, under the contracts, the incorporated procedures and standards amounted to a gateway to the companies' enjoyment of all other rights. To significantly narrow that gateway violated material conditions in the contracts. The breach was "substantia[l]," depriving the companies of the benefit of their bargain. Restatement § 243. And the Government's communication of its intent to commit that breach amounted to a repudiation of the contracts.

C

The Government argues that the companies waived their rights to restitution. It does not deny that the United States repudiated the contracts if (as we have found) OBPA's changes amounted to a substantial breach. The Government does not claim that the United States retracted its repudiation. Cf. id., § 256 (retraction will nullify the effects of repudiation if done before the other party either changes position in reliance on the retraction or communicates that it considers the repudiation to be final). It cannot claim that

621

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