Branco Enterprises, Inc. v. Delta Roofing, Inc.

Brief Fact Summary.

Branco Enterprises, Inc. (plaintiff) sued Delta Roofing, Inc. (defendant) based on the doctrine of promissory estoppel.

Synopsis of Rule of Law.

Under the doctrine of promissory estoppel, a subcontractor will be bound to an oral agreement when a general contractor reasonable relies of the sub’s bid, and a contract will exist.

Facts.

Plaintiff began accepting bids from subcontractors for work to be done on a renovation project. The defendant bid, submitted the lowest bid, and attempted to contact the plaintiff to confirm the bid. When the plaintiff asked whether they could rely on the defendant’s bid, they answered in the affirmative. After the plaintiff signed the contract to do the renovation work, the defendant informed them they would not be able to do the work they had bid on. While there was no contract, the plaintiff argued the doctrine of promissory estoppel was applicable.

Issue.

Whether under the doctrine of promissory estoppel, a subcontractor will be bound to an oral agreement when a general contractor reasonable relies of the sub’s bid, and a contract will exist.

Held.

Yes. Under the doctrine of promissory estoppel, a subcontractor will be bound to an oral agreement when a general contractor reasonable relies of the sub’s bid, and a contract will exist.

Discussion.

A contract is formed between a general contractor and a subcontractor if the general contractor relies on a sub’s bid when the general contractor makes their bid. This is the case because it is reasonable for a general contractor to rely on that sub’s bid. Furthermore, the sub would benefit from the general contractor accepting their bid and the sub should not be allowed to withdraw their bids after a general contractor has relied on the bid when calculating how much to bid for the overall project. Here, while there was no contract the defendant confirmed that they would be able to do the work and it follows that it was reasonable for the plaintiff to rely on it.