956 F.3d 950
7th Cir.2020Background
- Skyrise (subcontractor) submitted bids July 7 and July 19, 2017 to Annex (general contractor) for framing work; Annex sent a Letter of Intent on July 19 indicating it intended to enter into a contract and would provide contract documents.
- Annex emailed a multi-page Proposed Contract (with detailed general conditions) in August; Skyrise delayed returning it while reviewing; Annex signed the July 19 bid as “Contract exhibit A” on September 22 at Skyrise’s request.
- Skyrise returned a marked-up version of the Proposed Contract on October 11 with handwritten edits (including material changes to payment terms); Annex never signed the altered draft and later rejected Skyrise’s October 31 expanded proposal.
- Skyrise sued for breach of contract, promissory estoppel, negligent misrepresentation, violation of the Illinois Consumer Fraud Act, and violation of the Wisconsin Deceptive Trade Practices Act; the district court granted summary judgment to Annex.
- On appeal, the Seventh Circuit reviewed de novo and applied Wisconsin law to the contract claim (choice-of-law clause) and generally Wisconsin law to the other substantive claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a binding contract existed (Sept. 22 or Oct. 11) | Sept. 22 signature by Annex created contract; Oct. 11 signed Proposed Contract created contract | Sept. 22 signing was only marking the bid as an exhibit; Oct. 11 marked-up return was a material counteroffer that Annex never accepted | No contract: Sept. 22 showed no meeting of minds; Oct. 11 was a counteroffer and not accepted |
| Promissory estoppel | Skyrise reasonably relied on Letter of Intent and Annex’s conduct and blocked its schedule | Reliance was unreasonable because Letter and negotiations were conditional and meant to be followed by a formal contract | No estoppel: reliance was unreasonable; statements were an unenforceable agreement to agree |
| Negligent misrepresentation / Wisconsin & Illinois consumer-protection claims | Annex represented Skyrise had the framing work and induced reliance causing loss | Statements and conduct were part of negotiations, not false representations that Skyrise had a firm subcontract | Claims fail: no false or deceptive statement proved; only protracted, conditional negotiations shown |
| Choice of law | (Implicit) plaintiff did not contest application of project-law clause | Proposed Contract specified governing law; forum’s choice-of-law rules apply | Wisconsin law governs the contract claim; Wisconsin law applied to other claims absent a conflict (court did not need to decide Illinois Act applicability) |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard)
- Skycom Corp. v. Telstar Corp., 813 F.2d 810 (7th Cir. 1987) (objective intent and importance of public/shared expressions for meeting of minds)
- Hoffman v. Red Owl Stores, Inc., 133 N.W.2d 267 (Wis. 1965) (Wisconsin adoption of promissory estoppel doctrine)
- C.G. Schmidt, Inc. v. Permasteelisa N. Am., 825 F.3d 801 (7th Cir. 2016) (promissory estoppel is limited; conditional promises are inadequate for reasonable reliance)
- Disciplinary Hearings Against Nora, 909 N.W.2d 155 (Wis. 2018) (material revisions to an offer convert acceptance into a counteroffer)
- Dunlop v. Laitsch, 113 N.W.2d 551 (Wis. 1962) (agreements to agree are unenforceable)
- Cosgrove v. Bartolotta, 150 F.3d 729 (7th Cir. 1998) (conditional or hedged promises do not support promissory estoppel)