Drennan v. Star Paving Co.

Facts

On July 28, 1955, Drennan, a licensed general contractor, was preparing a bid on the Monte Vista School Job in the Lancaster school district, and bids had to be submitted before 8 p.m. Drennan testified that it was customary in that area for general contractors to receive subcontractors' bids by telephone on the day set for bidding and to rely on them in computing their own bids. Drennan's secretary received between 50 and 75 subcontractors' bids that day and wrote each on a form, which Drennan posted on a master cost sheet. His bid had to name the subcontractors who would perform one-half of one per cent or more of the work, and he had to provide a bidder's bond of 10 per cent of his total bid of $317,385 as a guarantee that he would enter the contract if awarded the work. Late that afternoon, Star Paving's estimator, Hoon, telephoned a bid of $7,131.60 for the paving work and repeated it at the secretary's request. It was the lowest paving bid. Drennan used it in computing his own bid, listed Star Paving as the paving subcontractor, and was awarded the contract. Drennan testified that the next morning Star Paving's engineer told him the company had made a mistake and could not do the work for the bid price; Star Paving refused to do it for less than $15,000. After several months of seeking bids, Drennan engaged L & H Paving Company to do the work for $10,948.60.

Issues

1. Did Drennan's reliance on Star Paving's bid make Star Paving's offer irrevocable before acceptance?
2. Did Star Paving's mistake in preparing its bid entitle it to revoke the offer?

Holding

Drennan's reasonable reliance made Star Paving's bid irrevocable: Star Paving had reason to expect and want Drennan to use its bid, and Drennan bound himself by his own bid, so Drennan had at least an opportunity to accept after winning the general contract, and he promptly told Star Paving that it was getting the subcontract. Star Paving's mistake did not let it revoke, because Drennan had no reason to know of it.