157 



understand how it operates. We at KPC believe we have met our 

 part of the bargain and respectfully submit that cancellation 

 of the contract does not make rational sense from a policy 

 standpoint. 



In addition, there are legal ramifications to cancellation 

 of the KPC contract. KPC believes that under well-established 

 and fundamental legal principles, the Congress is not at 

 liberty to cancel the KPC long-term sale. Contracts with the 

 United States, as do other kinds of contracts, give rise to 

 private rights, and it is well settled in the decisions of the 

 U.S. Supreme Court and the lower federal courts that unilateral 

 cancellation by the federal government of one of its contracts 

 deprives the private party thereto of property without due 

 process of law. We have therefore been advised that 

 legislation affecting a cancellation of KPC's contract would be 

 subject to a strong challenge under the Due Process Clause of 

 the Fifth Amendment. 



Even if contract-termination legislation survived a 

 constitutional challenge. Congress by enacting such legislation 

 would undertake for the federal government a substantial 

 financial obligation if it cancels the KPC contract. 

 Legislative cancellation would effect a total breach of the KPC 

 contract and/or a taking of private property from KPC for which 

 the Fifth Amendment imposes the requirement upon the government 

 to pay just compensation to KPC. 



If treated as a breach of contract, legislative 

 cancellation of the KPC contract will make the government 



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