Boise Junior College District v. Mattefs Construction Co.
450 P.2d 604 (1969)
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Rule of Law:
A contractor is entitled to the equitable relief of rescission of a bid that contains a material clerical mistake if enforcement would be unconscionable, the mistake did not result from culpable negligence, the offeree will not be prejudiced, and prompt notice of the error is given.
Facts:
- Boise Junior College District solicited bids for a construction project with an estimated cost of $150,000.
- Mattefs Construction Co. submitted a bid of $141,048 for the project.
- In preparing the bid under last-minute pressure, a Mattefs superintendent was distracted by phone calls and inadvertently omitted the subcontractor's bid for glass and glazing, which was $19,741.
- The omitted item represented approximately 14% of the total bid price.
- Immediately after the bids were opened, Mattefs' office manager discovered the omission.
- Mattefs informally notified the College District of the error on the evening of the bid opening and provided a detailed explanation the following morning, before the District had accepted the bid.
- The next lowest responsible bidder after Mattefs was Cain and Hardy, Inc., with a bid of $148,915.
- The College District ultimately awarded the contract to Cain and Hardy, Inc. for $148,915, a price below its own initial estimate.
Procedural Posture:
- Mattefs Construction Co. sued Boise Junior College District in an Idaho trial court, seeking equitable rescission of its construction bid to prevent forfeiture of its bid bond.
- The trial court found in favor of Mattefs Construction Co. and granted the relief of rescission.
- Boise Junior College District, as the appellant, appealed the trial court's judgment to the Supreme Court of Idaho.
- Mattefs Construction Co. is the respondent in the appeal to the Supreme Court of Idaho.
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Issue:
Is a contractor entitled to the equitable relief of rescission for a unilateral, material clerical mistake in its bid when it provides prompt notice of the error before acceptance and the other party suffers no prejudice other than the loss of the mistaken bargain?
Opinions:
Majority - Spear, J.
Yes. A contractor is entitled to the equitable relief of rescission for a unilateral mistake in its bid if five conditions are met. The court found that Mattefs satisfied all five conditions. First, the mistake was material, as the omitted glass bid represented 14% of the total contract price. Second, enforcement of the contract would be unconscionable because it would force Mattefs to suffer a substantial pecuniary loss of at least $10,000. Third, the mistake did not result from culpable negligence or a violation of a positive legal duty; it was a clerical and inadvertent error made under the typical last-minute pressures of bidding, not gross negligence. Fourth, the College District was not prejudiced, as it still received the work for less than its own architect's estimate; its only 'loss' was the failure to gain from an inequitable bargain. Finally, Mattefs provided prompt notice of the error before the College District formally accepted the bid, allowing the District to know the true situation before any action was taken.
Analysis:
This decision establishes a key precedent in contract law, particularly for public works bidding, by adopting a modern, equitable approach to unilateral clerical mistakes. It solidifies a five-part test that allows courts to relieve a bidder from an honest, material error, moving away from a rigid, unforgiving application of contract formation rules. This ruling distinguishes remediable clerical errors from non-remediable errors of business judgment, thereby preserving the integrity of the bidding process while preventing unconscionable outcomes. The case serves as a foundational example of how equity can intervene to prevent a party from taking unfair advantage of another's palpable mistake.
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