Branco Enterprises v Delta Roofing
Missouri Ct. of App.  1994
Author:- Sam Biers

Promissory Estoppel

Relevant Facts: Pl Branco wanted to bid on a proposed renovation and requested bids from subcontractors to install the roof.  There were specifications for the job that a bitumen roof of Derbigum, or an approved substitute of equal quality was to be used.  Approval had to come from the architect, and the roofer had to be certified to use Derbigum. Delta submitted a bid which was significantly lower than that of the other bids, which prompted pl to call and confirm the bid.  The estimator for df stated “that’s fine,” and pl accepted the bid.  The main contract was signed and then pl sent df three copies of a subcontract agreement, with request for certificates of insurance.  Delta did not execute and return the contracts, but did return a certificate of insurance. df president stated they had intentions of doing the job. Shortly after work began df notified pl they were not certified and were not going to do the job.  The cost to have another do the job was $18500 more. 

Legal Issue(s): Whether there was a contract between the parties based on the doctrine of promissory estoppel where Df made a bid to pl sufficient to expect performance which pl relied upon to its detriment?

Court’s Holding: Yes there was a K under promissory estoppel.

Procedure:   Pl brought suit to recover damages from breach by df, trial ct granted judgment to pl, Ct of Appeals Affirmed.

Law or Rule(s): A promise; with foreseeable reliance; with reliance; and injustice absent enforcement.

Court Rationale: The estimator testified he had seen the plans or specification for the job before he submitted Delta’s bid.  He submitted an initial bid and then a revised bid on the day pl compiled its bid. Df testified of awareness that pl was relying on df’s bid in formulating its bid.  Pl testified that df would not obtain variance [contrast] to permit it to substitute another product for Derbigum or obtain certification for df to apply Derbigum with a complete warranty; that df would perform the roofing task for the amount of its bid.  A promise by df to pl.  The estimator acknowledged that the reliance was acceptable to df.  It was foreseeable that pl would rely on df’s promise at the bid price.  Df refused to perform and pl was required to expend a greater sum.

 Plaintiff’s Argument: Df promised to perform at a set price, understanding and agreeing to the terms involved, acknowledged the reliance of the promise and then refused to perform.

Defendant’s Argument: Df’s bid did not make an unequivocal promise to pl sufficient to permit pl to unquestionably expect performance and to reasonably rely upon it.