C.G. Schmidt Incorporated v. Permasteelisa North America
825 F.3d 801
7th Cir.2016Background
- CGS solicited bids for a glass curtainwall with a CGS contract manual stating bids require acceptance of CGS terms and a formal subcontract; CGS selected PNA as contractor of choice but negotiations continued toward a final subcontract; CGS had not secured the prime contract or GMPA before signing a subcontract and PNA likewise would not contract without them; over roughly a year, PNA repeatedly updated its bid and raised concerns about terms while CGS countered with its own proposals; PNA eventually disengaged due to production capacity issues in Thailand and civil unrest in May 2014, and CGS replaced PNA with another subcontractor; CGS filed a diversity action alleging breach of contract and promissory estoppel, and the district court granted summary judgment for PNA on both claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there a binding contract formed by CGS’s selection of PNA’s bid? | CGS accepted PNA’s bid by selecting it. | No acceptance occurred; negotiations continued toward a formal subcontract. | No binding contract existed. |
| Does promissory estoppel apply to enforce PNA’s bid? | PNA’s bid was a promise relied on by CGS in its own bid. | Courts limit promissory estoppel in bidding; no enforceable promise. | Promissory estoppel does not apply. |
Key Cases Cited
- Gruen Indus., Inc. v. Biller, 608 F.2d 274 (7th Cir. 1979) (intent to be bound requires final written agreement; negotiations ongoing justify no contract)
- Seater Construction Co. v. Rawson Plumbing, Inc., 619 N.W.2d 293 (Wis. 2000) (promissory estoppel enforceable when bid incorporated into public project bid)
- Janke Construction Co. v. Vulcan Materials Co., 527 F.2d 772 (7th Cir. 1976) (promissory estoppel against subcontractor for reliance on bid in general bid)
- Drennan v. Star Paving Co., 333 P.2d 757 (Cal. 1958) (general contractor reliance on subcontractor’s bid in bidding;)
- Preload Tech., Inc. v. A.B. & J. Constr. Co., 696 F.2d 1080 (5th Cir. 1983) (limits on promissory estoppel when contractor counters; injustice not avoided by enforcing promise)
- APAC- Southeast, Inc. v. Coastal Caisson Corp., 514 F. Supp. 2d 1373 (N.D. Ga. 2007) (promissory estoppel inappropriate where contractor counters with form subcontract)