James Baird Co. v. Gimbel Bros., Inc.

Facts

Gimbel Bros., a New York merchant, knew that the Department of Highways in Pennsylvania had asked for bids to build a public building. It sent an employee to a Philadelphia contractor who held the specifications. The employee figured how much linoleum the job needed and came in at about half the proper amount. Unaware of that mistake, on December twenty-fourth Gimbel sent some twenty or thirty contractors likely to bid an offer to supply all the linoleum the specifications required, at two lump sums depending on quality. The offer said the prices were for prompt acceptance after the general contract had been awarded. James Baird Co., a contractor in Washington, received one of these offers on the twenty-eighth. That same day Gimbel learned of its mistake and telegraphed every contractor that it withdrew the offer and would substitute a new one at about double the amount. The telegram reached Baird that afternoon, but only after Baird had put in a bid at Harrisburg at a lump sum based on Gimbel's linoleum prices. The public authorities accepted Baird's bid on December thirtieth. Gimbel also wrote a letter confirming its withdrawal, received on the thirty-first. Baird formally accepted Gimbel's offer on January second. Gimbel kept refusing to recognize a contract, and Baird sued for damages for breach.

Issues

1. Did Baird accept Gimbel's offer by using Gimbel's linoleum prices in its bid to the public authorities, so that a contract existed before Gimbel withdrew the offer?
2. Can the doctrine of promissory estoppel, as stated in section 90 of the Restatement of Contracts, hold Gimbel to its offer because Baird relied on the quoted prices in making its bid?

Holding

Baird's use of Gimbel's prices in its bid was not an acceptance, so Gimbel withdrew the offer before any acceptance and no contract was made. Promissory estoppel did not apply, because Gimbel offered an exchange for Baird's promise, not for its bid.