Relief from mistaken bids are consistently allowed where one party knows or has reason to know of the other’s error and the requirements for rescission are fulfilled.
Defendants, a building contractor and his surety, appealed from a judgment for plaintiff school district in the school district's action to recover damages, which allegedly resulted from defendant contractor's failure to perform a contract after the contractor's low bid was accepted. Despite testimony from the contractor and plaintiff's witnesses, an architect and a superintendent, that there was an honest clerical error in compiling the bid, the trial court held that it would not be inequitable or unjust to require performance of the contract. The court therefore awarded damages to plaintiff. An appeal followed.
Must a contract be enforced if there were a clerical error acknowledged by parties on both sides of the dispute?
The appellate court reversed the judgment, holding that it would be unconscionable to hold defendant contractor to his bid at the mistaken figure. The court held that, because of the clerical error and defendant contractor's subsequent prompt rescission, he was not obliged to perform the contract.