Contracts & ExecutionQuestion 170 of 1632

When a general contractor relies on a subcontractor's bid to prepare its prime bid, the sub generally:

a.May withdraw the bid for any reason once the prime is awarded
b.May be bound to the bid under the detrimental reliance doctrine
c.Is bound only after a written subcontract is signed by both
d.Is released from the bid unless the general accepts in ten days

Explanation

When a general reasonably and foreseeably relies on a sub's bid in submitting its own, Drennan v. Star Paving holds the sub to that bid under promissory estoppel, even with nothing signed. Free withdrawal after award is exactly what the doctrine prevents, because the general is already committed at its own bid price. A signed subcontract is not the trigger — reliance is, which is the whole point of the doctrine. And no fixed ten-day acceptance window exists at common law; what matters is whether the general relied within a reasonable time.

Law Reference: Promissory estoppel; Drennan v. Star Paving Co. (1958) 51 Cal.2d 409

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