o July 28, 1955 (P) was preparing bid for a school
o Customary in that area to receive bids by telephone- received 50-75 sub- bids that day
o Estimator for (D), called in a bid for 7,131 for pavement work.
(D) bid was lowest, and so was the (P’s) bid…he was awarded the job and relied on (D) for pavement.
o Stopped by, next day, on which (D) rejected the deal.
(D) refused to do work for less than $15,000.
o 1st promise was for subcontract saying if you choose me I will do work at this price and 2nd promise is for subcontractor to keep it open and not change it until he hears about bid.
– Defendant’s argument
o No enforceable offer between parties on the ground that it was a revocable offer, and he revoked it before (P) communicated acceptance…(Option contract)
Court ruled – no option supported by consideration, nor bilateral contract binding both parties.
No consideration upon the deal
• However, it doesn’t need consideration to make a promise binding under unilateral contract.
o Mistake of bid price.
Court ruled – If mistake alters it, the (P) must know that there was a mistake (school v. Kastroff)….in this case, (P) had no reason to believe that there was a mistake…only $3,000 less.
Additional reason for enforcing it actually, mislead the (P)
o No consideration with allegiance to Restatement 90.
Court Ruled – that 90, actually shows that performance is not necessary if a person reasonably relies on the promise.
o Plaintiff failed to mitigate the damages or that they could not have been mitigated.
Evidence showed that he spent several months trying to get sub-contractors – Defendant’s argument was meritless.
– Plaintiff’s argument
o He relied on his detriment on the defendant’s offer, answer in damages for refusal to perform
– Superior court entered judgment for “Drennan”
o Entered judgment for $3,817 in favor of (P)
Definite offer to do paving, (P) relied on this offer, on computing his own bid…difference between plaintiffs bid and bid used (10,948.60).
– “Star” appealed, and judgment was affirmed in favor of “Drennan” in Supreme Court of California.
– Did (P)’s reliance make defendant’s offer irrevocable?
– The absence of consideration is not fatal to enforcing a contact….performance is not always necessary.
– Promise is binding if it has to be binding to prevent injustices from occurring.
– Restatement 90- a promise that should reasonably expect to induce action or forebearance of a definite and substantial character….such action or forebearance is binding if injustice can be avoided only by enforcement of the promise.
– That “something” must be bargained for and given in exchange…like it was here.
o Court ruled
Had reason to expect that if its bid had proved to be the lowest it would be used by plaintiff…”induced action of a definite and substantial character on the part of the promise.
Defendant did not state that bid could be “revocable” at any time prior to acceptance…kept silent…court must decide what was implied by this silence?
Part-performance or tender may furnish in place of consideration for the subsidiary promise.
Didn’t bargain for the use of its bid….however, reasonable to suppose that defendant submitted its bid to obtain the contract.
o Actually his own interest that bid get accepted. Reason to expect reliance.
o Could foresee harm
o Promptly informed (D) that he was being rewarded the job.
o (P) did not know figures were wrong when he accepted them.
School district v. Kastroff…in this case, it was $11,000 off, and the school district knew that it was off.
S. Dakota example- does not believe that it will abolish performance on unilateral promise contract—look at context of the case at hand.
• No evidence defendant offered to make bid irrevocable in exchange for plaintiffs use of figures in computing bid (option contract) and no evidence plaintiff would use defendants bid as acceptance binding plaintiff that he would award subcontract to defendant if he won (bilateral contact).