James Baird Co. v. Gimbel Bros. Inc.

64 F.2d 344 (2d Cir. 1933)

 

RULE:

A bid does not constitute an enforceable contract, nor can this be enforced under the guise of "promissory estoppel". "Promissory estoppel" only applies in order to avoid the harsh results when a promisee has acted in reliance upon the promise.

FACTS:

Defendant merchant sent contractors who were likely to bid on a construction job an offer to supply material needed for the job at set prices. Defendant did not realize that he was mistaken about the total quantity of the material needed for the job. Plaintiff contractor received defendant's offer and bid on the construction job that same day, basing its bid on the prices quoted by defendant. Later that same day, defendant telegraphed a withdrawal of the offer to contractors, having learned of his mistake. Plaintiff formally accepted defendant's offer several days after receiving the telegraph and the written confirmation of withdrawal. Defendant refused to recognize a contract, and plaintiff sued for breach of contract. The trial court directed a verdict for the defendant. The Court of Appeals affirmed, holding that because the offer was withdrawn before it was accepted, the acceptance was too late.

ISSUE:

Was there a contract between the parties?

ANSWER:

No.

CONCLUSION:

A contract is not automatically formed when submitting a bid for work. In addition, "unless there are circumstances to take it out of the ordinary doctrine, if an offer is withdrawn before it is accepted, the acceptance is too late."

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