Drennan v. Star Paving Co.

Author: Mike V.

Title & Citation	Drennan v. Star Paving Co. – 51 Cal. 2d 409, 333 P.2d 757 (1958)
Court	California Supreme Court
Issue	Does one party’s reliance on an offer make the offer irrevocable?
Arguments	P – general contractor – Relied to his detriment on D’s quote.
Arguments	D – sub – D revoked offer before it was accepted. There was no K.
Procedure	P sued D to recover damages caused by D refusing to perform paving work according to a bid. P won verdict in trial court. D appealed.
Fact	D’s estimator gave a 7K quote for paving work to P’s secretary. P computed the bid for the overall job and relied on D’s quote. P posted a 317K bond to guarantee the bid and won the contract. The next day, D informed P that D needed 15K, not 7K, to perform the paving work. P explained that he relied on D when determining the bid and would need D to honor the quote. D refused so P hired another sub for 11K to do the job.
Reference	M.F. Kemper Const. Co v. City of Los Angeles - D relies on cases where bids could be revoked because the bidder’s mistake was known or should have been known to the offeree. Court rejects argument. 2^nd RSTMT §90 – a promise which the promisor should reasonably expect to induce action or forbearance … is binding if injustice can be avoided only by enforcing the promise.
Holding	Yes, Affirmed – D had reason not only to expect plaintiff to rely on its bid but to want him to. Clearly, D had a stake in P’s reliance.
Rule / Reason	Merely acting in justifiable reliance on an offer may in some cases serve as sufficient reason for making the promise binding. The loss resulting from the mistake should fall on the party who caused it.
Dissent
Comments	Court notes that if D’s bid expressly stated or implied that it was revocable at any time before acceptance, D would not be liable.

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