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Arizona Court of Appeals - 18 Ariz. App. 101
Tags: Contracts, Options contracts, Acceptance
tl;dr:
A general contractor received bids from a subcontractor on two occasions, but rejected the bids both times. The subcontractor sued.Video Summary
Case Summary
In Corbin-Dykes Electric Co. v. Burr (1972), the Arizona Court of Appeals backed a ruling in favor of the defendant, a general contractor who used the plaintiff's bid for electrical work in a proposal but chose a different subcontractor after winning the main contract. This case highlights the difference between an offer and an invitation to deal in contract formation.
The court decided that the plaintiff's bid was not an offer that the defendant could accept by simply using it in their proposal, but instead an invitation to deal needing further agreement from both sides to create a binding contract. The court found no evidence of such agreement or any consideration given by the defendant to keep the plaintiff's bid open.
The court also dismissed the plaintiff's claim that the defendant's actions stopped them from denying a contract existed. The case reveals that a bid or proposal is not always an offer that can be accepted merely by use or reliance, but might require further communication or negotiation to create a contract. It also shows that courts won't enforce contracts missing key elements like mutual agreement or consideration.
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The case involves a dispute between Corbin-Dykes Electric Company and Walter Burr, et al. over the existence of a contractual relationship. Corbin-Dykes submitted a low bid for an electrical subcontract, which was included in Burr's bid for the overall construction contract. Burr was awarded the contract and selected Sands Electric Company as the subcontractor instead of Corbin-Dykes. Corbin-Dykes sued Burr for breach of an alleged subcontract, but the trial court granted summary judgment in favor of Burr. Corbin-Dykes appealed, arguing that a custom and usage in the trade existed where a subcontractor listed in the general contractor's bid would receive the subcontract if the general contractor was awarded the contract. However, there was no other evidence of Burr's acceptance of the subcontract offer. The appeal raises two questions: whether the trial court was justified in granting summary judgment to Burr and whether there remains a genuine issue as to a material fact that would preclude granting summary judgment. The court believes that custom and usage evidence presented by Corbin-Dykes is not enough to establish Burr's acceptance of the subcontract. For a contract to exist, there must be a mutual manifestation of assent by both parties, and their actions must show that they intended to enter into the contract. Evidence of custom or usage is admissible only when an existing agreement between the parties is ambiguous.
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