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Expectation damages attempt to place the plaintiff in the position that he or she would have occupied if the contract had been performed or if the promise had been kept. Appropriate measure of damages for a general contractor's promissory estoppel claim is the difference between the nonperforming subcontractor's bid and the bid of the substituted subcontractor that completed the work.
This case arose from a dispute between appellant Dynalectric Company of Nevada, Inc., a subcontractor, and respondent Clark and Sullivan Constructors, Inc., a general contractor, concerning a public works project. The Project involved the expansion of a medical center where the respondent won the bid. Respondent solicited bids for electrical work on the project, respondent notified appellant but the latter repudiated its obligations, and refused to negotiate with respondent. Respondent therefore contracted with three replacement subcontractors to complete the electrical work for the Project. Respondent then sued appellant under various theories of liability, including breach of contract, promissory estoppel, and breach of the covenant of good faith and fair dealing. Appellant countersued for, among other theories, breach of an implied contract, fraud, and violation of NRS 338.141. After the trial, the district court entered a judgment for respondent on its promissory estoppel claim and rejected each of appellant’s counterclaims. The district court awarded respondent $2,501,615 in damages. Appellant appealed.
Did the district court err in its decision in granting respondent’s promissory estoppel claim and awarding the damages?
No. The judgment was affirmed.
The court held that based on respondent general contractor's claim for promissory estoppel, the district court was permitted to award expectation, reliance, or restitutionary damages. The district court properly awarded expectation damages and used the appropriate measure when it awarded damages representing the difference between the appellant nonperforming subcontractor's bid and the amount three replacement subcontractors charged to complete the same work.