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    Drennan V Star Paving Co.

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    crlstinaaa
    Drennan, a general contractor, relied on a subcontractor bid from Star Paving to submit its own general bid. After being selected, Drennan informed Star it planned to accept the bid, but Star then withdrew the bid, claiming a mistake. The court found for Drennan, holding that while no contract existed, promissory estoppel made Star's offer irrevocable given Drennan's reasonable reliance, as Star should have foreseen. The loss from Star's mistake fell on Star as the cause, to avoid injustice to the relying party.

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    Drennan V Star Paving Co.

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    crlstinaaa
    639 views2 pages
    Drennan, a general contractor, relied on a subcontractor bid from Star Paving to submit its own general bid. After being selected, Drennan informed Star it planned to accept the bid, but Star then withdrew the bid, claiming a mistake. The court found for Drennan, holding that while no contract existed, promissory estoppel made Star's offer irrevocable given Drennan's reasonable reliance, as Star should have foreseen. The loss from Star's mistake fell on Star as the cause, to avoid injustice to the relying party.

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    Drennan v Star Paving Co.

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    Drennan, a general contractor, relied on a subcontractor bid from Star Paving to submit its own general bid. After being selected, Drennan informed Star it planned to accept the bid, but Star then withdrew the bid, claiming a mistake. The court found for Drennan, holding that while no contract existed, promissory estoppel made Star's offer irrevocable given Drennan's reasonable reliance, as Star should have foreseen. The loss from Star's mistake fell on Star as the cause, to avoid injustice to the relying party.

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    Download as TXT, PDF, TXT or read online from Scribd
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    639 views2 pages

    Drennan V Star Paving Co.

    Uploaded by

    crlstinaaa
    Drennan, a general contractor, relied on a subcontractor bid from Star Paving to submit its own general bid. After being selected, Drennan informed Star it planned to accept the bid, but Star then withdrew the bid, claiming a mistake. The court found for Drennan, holding that while no contract existed, promissory estoppel made Star's offer irrevocable given Drennan's reasonable reliance, as Star should have foreseen. The loss from Star's mistake fell on Star as the cause, to avoid injustice to the relying party.

    Copyright:

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    of 2

    Case: Drennan v Star Paving Co.

    (1958) 383-389 (CA Supreme Court)

    Parties: Plaintiff - Drennan (offeree, general contractor)


    Defendant - Star (offeror, subcontractor)

    Procedural History: Judgment for plaintiff, defendant appeals.

    Facts: Plaintiff Drennan was a contractor bidding on a construction job, and was
    accepting bids from subcontractors, so they could conclude a cost they could place
    the bid for. Defendant Star, a subcontractor, placed a bid for the paving work
    for $7,131.60, and this was confirmed. Drennan, used this bid, being the lowest,
    and placed their bid based on this offer. Plaintiff then went to Star's office
    the next day, and Defendant told him they made a mistake and couldn’t do the work
    for less than $15k. Plaintiff couldn’t find another subcontractor to do the work
    for the amt Star had offered, and ended up paying $10, 948.60. Drennan is suing
    Star for the difference plus costs.

    Issue: Did plaintiff's reliance make defendant's offer irrevocable? No.

    Holding: Judgment affirmed; for plaintiff based on promissory estoppel.

    Reasoning: There was no contract created, since offeror retracted the offer
    before offeree could accept. There was no option supported by consideration, to
    make the offer irrevocable.

    RULE: Judge Traynor says that Star knew exactly what their bid was going to be
    used for. Star presented Drennan with a bid with full knowledge that Drennan
    would accept their bid (being the lowest) and rely on it to submit their own
    general bid. Star is expected to have foreseen this and should act cautious when
    submitting a bid, so that they don’t mislead someone because of their own error.
    Traynor says between the two parties, Star who made a bid (erroneously), and
    Drennan who relied upon it, the loss resulting from the mistake should fall on the
    party who caused it, Star

    Notes

    • Bid not revocable.


    • Is there a promise? - no.
    ○ Is there an expectation on Star's part, that is Drennan gets the bid, that
    they will do the subcontract work? - Yes, but an expectation is not a promise.
    ○ How is Star's offer to be accepted? - by promise. Drennan would have to
    inform Star they are accepting the bid.
    ○ So, there is a dilemma here - acceptance is by promise, so restatement 45
    wont work because only for unilateral contract.
    ○ Drennan visits Star, but didn’t actually accept (b/c Star revoked before
    he could)
    • Plaintiff's reliance made the offer irrevocable - within a reasonable time
    period (determined by circumstances - its contextual)
    ○ Reliance by Drennan was reasonable - this was a foreseeable reliance
    ○ Star would expected that Drennan would rely on it, but again, no actual
    promise
    • This rule applies in this state (Supreme Court of CA tells you it has adopted
    the view of the restatement)

    Pg 386 - idea of how long offer remains irrevocable. "It bears…" notion of
    reasonableness
    • Option - better to do WITH consideration
    ○ The resiliency of the option if better with consideration
    ○ If there is an option contract with consideration, there can be no
    revocation, and a counteroffer has no effect
    § Any counteroffer could terminate the reliance option
    • For Star to have been bound you could have asked for
    ○ A conditional acceptance (Drennan accepts Star's bid if Drennan gets the
    job)
    ○ Or ask for an option contract

    • This is a reliance option (no consideration) - how long does this last?
    ○ Reasonable time here

    Restatement 87 -
    (1) An offer which the offeror should reasonably expect to induce action or
    forbearance of a substantial character on the part of the offeree before
    acceptance and which does induce such action or forbearance is binding as an
    option contract to the extent necessary to avoid injustice.

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