64 F.2d 344 (2d Cir. 1933)
The plaintiff, James Baird Co., a contractor based in Washington, sued the defendant, Gimbel Bros., Inc., a New York merchant, for breach of a contract to deliver linoleum.1 The parties tried the case to the judge under a written stipulation.2 He directed judgment for the defendant.3 The only issue discussed concerned whether a contract had been formed.4
The defendant knew that the Department of Highways in Pennsylvania had asked for bids for the construction of a public building.5 It sent an employee to the office of a contractor in Philadelphia who had possession of the specifications.6 The employee computed the amount of linoleum required on the job, underestimating the total yardage by about one-half the proper amount.7
In ignorance of this mistake, on December twenty-fourth the defendant sent to some twenty or thirty contractors likely to bid on the job an offer to supply all the linoleum required by the specifications at two different lump sums depending upon the quality used.8 These offers concluded with the statement that if successful in being awarded the contract it would be absolutely guaranteed and that the prices were offered for reasonable prompt acceptance after the general contract had been awarded.9 The plaintiff received one of these offers on December twenty-eighth.10 On the same day the defendant learned of its mistake and telegraphed all the contractors to whom it had sent the offer that it withdrew the offer and would substitute a new one at about double the amount of the old.11
The withdrawal reached the plaintiff at Washington on the afternoon of the same day but not until after it had put in a bid at Harrisburg at a lump sum based as to linoleum upon the prices quoted by the defendant.12 The public authorities accepted the plaintiff's bid on December thirtieth.13 The defendant meanwhile wrote a letter of confirmation of its withdrawal that was received on the thirty-first.14 The plaintiff formally accepted the offer on January second, and when the defendant persisted in declining to recognize the existence of a contract the plaintiff sued for damages on the breach.15
Whether the plaintiff's use of the defendant's quoted prices in submitting its bid to the public authorities constituted acceptance of the defendant's offer?16
An offer may be revoked at any time before acceptance, and acceptance requires communication of assent or performance of the act the offeror has requested in exchange, under the ordinary doctrine restated in section 35 of the Restatement of Contracts.17
No. The established facts demonstrate that the defendant telegraphed its withdrawal on December twenty-eighth and the message reached the plaintiff that afternoon, before the plaintiff sent any formal acceptance on January second.18 The plaintiff's submission of its bid to the public authorities did not operate as acceptance.19 The offer expressly conditioned any obligation on prompt acceptance after the general contract had been awarded and on the defendant being successful in that award.20 Neither condition occurred merely by the plaintiff's use of the quoted prices.21
The plaintiff's use of the quoted prices in its bid did not constitute acceptance of the defendant's offer.22
Whether the doctrine of promissory estoppel prevented the defendant from withdrawing its offer after the plaintiff had relied on the prices by submitting its bid?23
The doctrine of promissory estoppel has now been generalized in section 90 of the Restatement of Contracts.24 The doctrine is to avoid the harsh results of allowing the promisor in such a case to repudiate, when the promisee has acted in reliance upon the promise.25 But an offer for an exchange is not meant to become a promise until a consideration has been received, either a counter-promise or whatever else is stipulated.26
No. The established facts show that the defendant offered to deliver linoleum in exchange for the plaintiff's promise to take and pay after the award, a matter of indifference to the defendant until that promise arrived, rather than a donative promise made without expectation of an equivalent.27 Because the plaintiff had not yet supplied the requested acceptance when the withdrawal reached it, the doctrine of promissory estoppel supplies no basis for holding the offer irrevocable.28
The doctrine of promissory estoppel did not prevent the defendant from withdrawing its offer.29
Whether the defendant's offer constituted an option contract that gave the plaintiff the right to accept after its bid was accepted without binding the plaintiff to take the linoleum?30
An offer is not construed as creating a one-sided option contract unless the language or circumstances clearly show that the offeror intended to subject itself to such an obligation without receiving a corresponding commitment from the offeree.31
No. The established facts contain no indication that the defendant meant to allow the plaintiff to accept the linoleum only if a better bargain could not be found elsewhere.32 Instead the offer language looked to the usual communication of acceptance after the general contract had been awarded and presupposed a mutual exchange once that acceptance occurred.33
The defendant's offer did not constitute an option contract granting the plaintiff an unconditional right to accept after its bid succeeded.34