Flintco Pacific, Inc. v. TEC Management Consultants, Inc.
205 Cal. Rptr. 3d 21
Cal. Ct. App.2016Background
- TEC submitted a written bid ($1,272,960) to Flintco for glazing work that expressly included material conditions: a 35% deposit, no bond, no liquidated damages, a 15-day acceptance period, and a 3% per-quarter escalation after 15 days.
- Flintco used TEC’s bid price in its prime bid and was awarded the prime contract; Flintco listed TEC as the subcontractor.
- After award, Flintco sent a letter of intent and its standard-form subcontract to TEC; those documents omitted or conflicted with TEC’s bid conditions (no 35% deposit, included liquidated damages, bond requirements, etc.).
- TEC repeatedly raised the conflicts and ultimately notified Flintco it would not pursue the subcontract and withdrew its bid; Flintco then hired a replacement subcontractor and sued TEC for promissory estoppel damages.
- The trial court found Flintco’s reliance on TEC’s price alone unreasonable because Flintco ignored material bid terms; Flintco’s letter/subcontract constituted a counteroffer that terminated its power to accept TEC’s original offer. Judgment for TEC affirmed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Flintco reasonably relied on TEC’s bid such that promissory estoppel binds TEC to its bid price | Flintco: industry custom permits relying on bid price alone at bid time; no indication TEC wouldn’t honor bid before August | TEC: bid contained clear, material conditions affecting price; reliance on price alone was unreasonable | Court: Reliance was unreasonable; substantial evidence supported that TEC’s conditions materially affected price and Flintco ignored them |
| Whether Flintco’s post-award communications constituted a counteroffer that let TEC withdraw | Flintco: its letter of intent/subcontract were routine and did not terminate TEC’s offer | TEC: letter and standard subcontract materially varied from TEC’s bid (qualified acceptance) and thus were a counteroffer, terminating Flintco’s power to accept | Court: Flintco’s documents qualified the acceptance and were a counteroffer; TEC properly withdrew its bid |
Key Cases Cited
- Drennan v. Star Paving Co., 51 Cal.2d 409 (recognizes promissory estoppel where subcontractor’s bid is relied on by general contractor)
- Saliba–Kringlen Corp. v. Allen Engineering Co., 15 Cal.App.3d 95 (customary practice of resolving post-award subcontract terms; reliance is fact-specific)
- Diede Construction, Inc. v. Monterey Mechanical Co., 125 Cal.App.4th 380 (discusses promissory estoppel elements in subcontractor‑bid context)
- H. W. Stanfield Constr. Corp. v. Robert McMullan & Son, Inc., 14 Cal.App.3d 848 (cases addressing mistaken bids and estoppel principles)