Drennan v. Star Paving Co.
Supreme Court of
51 Cal.2d 409, 333 P.2d 757.
Facts: The plaintiff is a contractor who was looking for a subcontractor to do some paving. The defendant put in an unusually low bid, and based on this bid, the plaintiff made the low bid for the main construction contract. However, after that contract was made, the defendant said they had made a mistake and wouldn’t do the paving for the price they’d offered before. The plaintiff had to go out and find a different subcontractor to do the paving at a higher price. The plaintiff sued the defendant for the difference in cost. The defendant argued that there was no contract because the defendant made a revocable offer and revoked it in time. The plaintiff says they should recover on the basis of reliance.
Issue: Did the plaintiff’s reliance make the defendant’s offer irrevocable?
Rule: If you make a promise that you should reasonably expect will cause the promisee to act in reliance to their detriment, and it actually does cause them to act, then you may be bound to that promise if necessary to avoid injustice.
Analysis: The court finds that the defendant reasonably induced reliance on the part of the plaintiff.