Weitz Co. v. Hands, Inc.
294 Neb. 215
Neb.2016Background
- Weitz, a prequalified general contractor, used H&S’s plumbing/HVAC bid (submitted ~15 minutes before the 2:00 p.m. deadline) to compose its $9.2M bid for a nursing facility; Weitz listed H&S among its "Major Sub-Contractors."
- Good Samaritan awarded the general contract to Weitz; Weitz notified H&S that it had carried H&S’s number and expected to subcontract the work to H&S.
- H&S’s owner later claimed bid errors (initially >$250,000, later >$430,000) and refused to honor the bid; H&S had tried to pull the bid before but estimators had already sent it.
- Weitz completed the plumbing/HVAC work using replacement subcontractors at higher prices; Weitz quantified damages as the difference between replacement subcontract prices ($2,814,700) and H&S’s bid plus option pricing ($2,522,208) = $292,492.
- Weitz sued for breach of contract and promissory estoppel; the trial court found no contract but enforced H&S’s bid under promissory estoppel and awarded $292,492; H&S appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether H&S’s bid created a promise giving rise to promissory estoppel | Weitz: H&S’s bid was a foreseeable promise; Weitz relied by incorporating it into its bid | H&S: The invitation and owner veto right precluded reasonable reliance; bid was revocable or mistaken | Court: Bid was a foreseeable promise; reliance was reasonable despite owner’s veto right |
| Whether Weitz’s reliance was reasonable | Weitz: Industry practice and prior dealings with H&S made reliance reasonable, time pressure (15 min) made verification impracticable | H&S: Bid was unusually low, Weitz could have required open-quote or withdrawn without consequence; Weitz might bid-shop | Court: Reliance reasonable—bid was not obviously a mistake, market conditions explained low bids, no evidence of bid-shopping |
| Whether enforcement was necessary to avoid injustice | Weitz: Enforcing prevents loss shifting to general contractor who relied | H&S: Enforcing punishes a mistaken subcontractor; equitable relief inappropriate | Court: Enforcement required to avoid injustice; loss should fall on promisor who caused it |
| Proper measure of damages under promissory estoppel | Weitz: Recovery equals difference between substitute subcontract cost and reneging bid (benefit-of-bargain in bidding cases) | H&S: Damages should be reliance-only or zero; Weitz failed to prove damages with certainty | Court: In construction-bidding context, damages measured as difference between substitute cost and original bid; Weitz proved damages to reasonable certainty |
Key Cases Cited
- Drennan v. Star Paving Co., 51 Cal.2d 409 (Cal. 1958) (subcontractor’s bid can be binding where general contractor reasonably relies)
- deNourie & Yost Homes v. Frost, 289 Neb. 136 (Neb. 2014) (Nebraska formulation of promissory estoppel elements)
- Rosnick v. Dinsmore, 235 Neb. 738 (Neb. 1990) (promissory estoppel damages measured as justice requires; reliance measure often appropriate)
- Hawkins Constr. Co. v. Reiman Corp., 245 Neb. 131 (Neb. 1994) (general contractor cannot bind subcontractor when demanding onerous, nonstandard post-bid terms)
- Dynalectric Co. v. Clark & Sullivan Construct., 127 Nev. 480 (Nev. 2011) (construction-bidding damages measured as difference between reneging bid and replacement cost)