Drennan v. Star Paving Co.

51 Cal. 2d 409, 333 P.2d 757 (1958)

 

RULE:

Reasonable reliance resulting in a foreseeable prejudicial change in position affords a compelling basis for implying a subsidiary promise not to revoke an offer for a bilateral contract. The very purpose is to make a promise binding even though there was no consideration in the sense of something that is bargained for and given in exchange. Reasonable reliance serves to hold the offeror in lieu of the consideration ordinarily required to make the offer binding. 

FACTS:

Plaintiff was a licensed general contractor preparing a bid for a school district. Defendant subcontractor was the lowest bidder for the paving work. Plaintiff used defendant's bid in computing his own bid for a school project. The day after receiving defendant's bid, plaintiff stopped by defendant 's office, whereupon plaintiff was informed that defendant's bid was a mistake. Defendant refused to do the paving work at the price originally given plaintiff. Plaintiff sued defendant to recover damages caused by defendant's refusal to perform the work according to its bid. 

ISSUE:

Should the Defendant be held liable for the extra cost incurred by Plaintiff?

ANSWER:

Yes.

CONCLUSION:

The court affirmed the award of damages to plaintiff, since the loss resulting from any mistake fell upon the party who caused it. Plaintiff had no reason to believe that defendant's bid was in error and plaintiff was entitled to rely upon it.

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