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Boise Junior College Dist. v. Mattefs Constr. Co. - 450 P.2d 604

Rule:

One who errs in preparing a bid for a public works contract is entitled to the equitable relief of rescission if he can establish the following conditions: (1) the mistake is material; (2) enforcement of a contract pursuant to the terms of the erroneous bid would be unconscionable; (3) the mistake did not result from violation of a positive legal duty or from culpable negligence; (4) the party to whom the bid is submitted will not be prejudiced except by the loss of his bargain; and (5) prompt notice of the error is given.

Facts:

Respondent construction company submitted a bid proposal to appellant, accompanied by a bid bond, which contained a promise to pay the difference between the bid and the next higher bid if respondent refused to enter into a contract with appellant. Shortly after the bids were opened, respondent notified appellant that its bid contained an error, the omission of an item constituting 14% of the total bid. Appellant contracted with a higher bidder, sought to collect on respondent's bond, and challenged the trial court's granting of the equitable remedy of rescission.

Issue:

Was the error of the respondent material in the contract allowing rescission?

Answer:

Yes

Conclusion:

The judgment of rescission was affirmed as the respondent's material mistake resulted from a clerical oversight, appellant was promptly notified of the mistake, and enforcement would have resulted in a substantial hardship to respondent. In affirming the lower court's ruling, the court concluded that the error was material, resulted from a clerical oversight, and was promptly communicated to appellant. Appellant suffered no prejudice as a result, and enforcement would constitute a substantial hardship on respondent; therefore, rescission was appropriate.

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