– Madsen was awarded a contract to do business and left out Holman.
– Even though Holman won the preliminary bid for lowest bid, Madsen did not pick Holman to perform the deal.
– Sued Madsen saying that he accepted the sub-bid.
- Listing Holman as the sub-contractor, as required by authority, constitutes acceptance.
- No other reasonable explanation for the act.
- Unfair to bind Holman to the bid and bind Madsen.
- Madsen knew general bid was public knowledge, inference can be drawn that Madsen intended to accept Holman’s offer and communicated assent by listing Holman in the general bid.
– Trial court awarded summary judgment for Madsen and Holman appealed
– Re-affirmed in appellate court.
– Are general contractors bound to sub-contractors bids?
– Sub-contractor may be obligated to perform by application of primary estoppel.
– General contractor is not obligated to perform a sub-contractors bid.
– General’s reliance on sub-contractor.
- Justifiable reliance by the general on the sub-contractor’s price for specified work- general is bound to his own bid, which makes the sub- bound to the general
- Subject general to financial detriment
– Sub-contractor does not rely on General
- Suffers no detriment
- Submits bids to all, or almost all Generals that are working on a particular project.
- Total cost is overhead of conducting business…don’t lose money…same bid throughout process…same work and expenses regardless.
- Nature of bidding process allows generals sufficient leeway to maintain flexibility in executing sub-contractors on a job.
- General’s bids are hectic, last minute, prevents bid-shopping.
- Sub-contractors are meticulous , entered way before General submits his bid.
- Not only lowest price wins- reliability, capability, quality of work are all factored in….Also the use of MBE.
- If bound to bids listed in its prime, contract could fail to due complying with MBE regulations.