Contracts & ExecutionQuestion 877 of 1605

A general contractor uses a subcontractor's bid to prepare and win the prime contract, reasonably relying on that bid. If the sub then tries to withdraw the bid, the general may argue the sub is bound under:

a.The parol evidence rule
b.Promissory estoppel, based on the general's reasonable reliance on the sub's bid
c.The Statute of Frauds only
d.A force majeure clause

Explanation

Courts have applied promissory estoppel to hold a subcontractor to its bid when a general contractor reasonably and foreseeably relies on that bid in preparing and submitting its own successful prime bid. The sub should expect such reliance, and injustice would result if the sub could freely withdraw after the general is committed. The parol evidence rule, the Statute of Frauds, and force majeure clauses do not address this reliance-based enforcement of a bid.

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Reviewed by Abraham Chen Licensed California General Contractor (CSLB License #1101856 verify)
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