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11. Which of the following, if proved, would most strengthen the general contractor's prospect of recovery?
Three other competing hangers sent the general contractor similar bids in the respective amounts of $18,000, $19,000, and $20,000. The general contractor used the wallpaper hanger's $14,000 figure in preparing and submitting her own sealed bid on Doctors' Building. Before the bids were opened, the wallpaper hanger truthfully advised the general contractor that the former's telegraphic sub-bid had been based on a $4,000 computational error and was therefore revoked. Shortly thereafter, the general contractor was awarded the Doctors' Building construction contract and subsequently contracted with another paperhanger for a price of $18,000. The general contractor now sues the wallpaper hanger to recover $4,000.
/s/ the wallpaper hanger
Will do all paperhanging on new Doctors' Building, per owner's specs, for $14,000 if you accept within reasonable time after main contract awarded.
A wallpaper hanger sent a general contractor this telegram:
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Courts and the Second Restatement of Contracts recognize several situations in which an offeree's actions in reliance upon an offer may render that offer temporarily irrevocable. § 87-2 of the Second Restatement applies to situations where the offeree begins actual performance prior to acceptance and is most often applied to cases involving offers from subcontractors to general contractors. When a subcontractor submits a bid to the general contractor, who then relies upon it in figuring out his own overall bid, the subcontractor's bid is usually held irrevocable for at least the time necessary for the general contractor to obtain the job and then accept the subcontractor's bid.
B is correct. This additional fact, if proven, would most strengthen the general contractor's prospect of recovery because it is the only answer that will allow the general contractor to argue that the wallpaper hanger's offer was irrevocable. As explained above, § 87-2 provides an exception to the general rule that offers are revocable any time before acceptance by making a subcontractor's bid to a general contractor temporarily irrevocable (i.e., the subcontractor cannot revoke their offer to the general contractor after submitting the bid for the time necessary for the general contractor to get the job). In this question, if the general contractor had to pay a bid bond when submitting his offer, the presumption of the general contractor's substantial reliance upon the subcontractor's bid becomes even stronger under § 87-2.
A is incorrect. The general contractor mitigating damages will not strengthen her chances of recovery. As explained above, the only way the general contractor can prevail is if she can show that the wallpaper hanger's offer was temporarily irrevocable. While making reasonable efforts to mitigate damages is a good faith effort from the general contractor, it does nothing to prove the offer was temporarily irrevocable.
C is incorrect. The negligence of the subcontractor in preparing his own bid also does not make the offer temporarily irrevocable. Even if the subcontractor was grossly negligent in preparing the bid, it would be irrelevant because, unless an exception applies, he had the right to revoke his offer at any time before the general contractor accepted.
D is incorrect. The general contractor's good faith behavior is not a factor that can make an offer irrevocable. As explained above, the general contractor's only chance of recovery is proving that the wallpaper hanger's bid was temporarily irrevocable.