Drennan v. Star Paving Co.

Case brief summary

Facts

A subcontractor told a general contractor by phone that it would do paving work for a set price, and the general contractor used that price to calculate his own bid for a school construction job.

Procedural history

The trial court ruled in favor of the general contractor and awarded him money damages, and the subcontractor appealed that decision to the California Supreme Court.

Issue

Does a general contractor's reasonable reliance on a subcontractor's bid prevent the subcontractor from canceling that bid before the general contractor formally accepts it?

Holding

Yes, because the general contractor reasonably relied on the subcontractor's bid to his detriment, the subcontractor could not revoke it and had to pay damages.

Reasoning

The subcontractor should have known its bid would be used in the contractor's overall bid. Once the contractor relied on it, the promise became binding, even though the subcontractor had made a mistake.

Opinions

Majority (Traynor): The subcontractor's bid became a binding promise because the general contractor reasonably relied on it, so the subcontractor owed damages for backing out.