Case: SKB Industries, Inc.

v Insite (2001) 389-391 Court of Appeals, GA

Parties: Plaintiff - Insite (offeree, Contractor)

Defendant - SKB (offeror, subcontractor)

Procedural History: Trial court allowed Insite to pursue claim based on

promissory estoppel.

Facts: Beers was the general contractor accepting bids for the landscaping and
hardscaping work on their project. SKB submitted a bid for the landscaping
portion to Insite, and Insite then used this amount to place a bid to Beers. Beers
suspected there might have been an error, because the bid by SKB was much lower
than the next lowest bid. SKB said at first, no, they knew all Beer's
specifications, and the bid was fine, but later informed Insite and beers that
they made a mistake by using lower priced materials which Beers didn’t want.
Beers ok'd using the lower priced materials, and SKB then sent Insite an invoice
for the revised amount, and SKB told Insite it would use those materials. Beers
then accepted Insite's bid. Insite then sent SKB an invoice for a little more
than SKB's initial bid. SKB never signed the subcontract and later refused to do
a substantial amount of work (because they realized they bid too low on portions
of the work), which caused Insite to spend more on the landscaping portion than
they would have if SKB had done the work.

Issue: Whether KB could revoke the bid given to Insite. - No, they are liable.

Holding: Judgment affirmed. Insite allowed to pursue claim based on promissory

estoppel.

Reasoning: Court says promissory estoppel (for diff in cost of the actual work,
and the cost if SKB did the work at the cost they put a bid for) ok if:
(1) SKB made a promise to do the landscape work in the bid submitted to
Insite
(a) No evidence that SKB's bid was intended to be revocable anytime
before acceptance
(b) Insite's reliance on the bid provided enough consideration under
promissory estop. To imply an enforceable promise to be open for a reasonable time
so as to allow Insite to submit its own bid to Beers, and be awarded it.
(2) SKB should have expected that Insite would rely on the promise
(a) Yes, because SKB submitted the bid to Insight for the express
purpose of allowing that bid be used in Insite's bid to Beers. It was also
foreseeable that Insite would suffer damages.
(3) Insite did rely on the promise to its detriment
(a) Yes, they ended up paying a lot more for the work than they would
have if SKB did the work at the bid price
(b) Also, SKB argued that the subcontract represented the entire
agreement, which would make promissory estoppel inapplicable. This is because if
SKB and Insite had reached an subsequent agreement for ALL the work in the bid,
then Insite could not say it detrimentally relied. However, court said no,
because the work SKB refused to do (which was included in the bid), was expressly
excluded from the subcontract.
1) Court also says that even if there was some ambiguity in the
subcontract to whether Insite intended to release SKB from the bid, there was
evidence presented that proved there was no such intention.
(4) Injustice can be avoided only by enforcement of the promise

Notes

Restatement 90
Promissory estoppel, not the best way to go on these types of situations, because
courts decide based on avoiding injustice.
"When can parties walk away without any liability?"