James Baird Co. v. Gimbel Bros.
64 F.2d 344 (2nd Cir. 1933)
was a linoleum seller.He
heard that Pennsylvania, was building a new building.Gimbel sent an employee to
calculate how much linoleum would be needed for the building.
sent out offers to a bunch of contractors who they figured might be
bidding on the contract to build the building.The offer was to supply all the linoleum necessary to
build the new building.
had made a mistake as to how much linoleum was needed (they thought only
half as much was needed as actually was required), so their offer price
was basically half of what it should have been.
having received Gimbel's offer, put in a bid to build the State building based
on that offer that same day.Gimbel telegraphed all the contractors to let them know of the
mistake.But the State had
already accepted Baird's offer, and Baird sent the Gimbel an acceptance.
denied that a contract had been made, and Baird sued for breach of
argued that that it was understood that the contractors would be making
bids in reliance on the Gimbel's offer to supply linoleum. (promissory
Trial Court found for the Gimbel.Baird appealed.
Court affirmed the decision.
Court found that there was no contract between the parties because putting
in a bid could not be construed to constitute an acceptance.
was under no obligation to buy Gimbel's linoleum if they didn't win the
contract (or even if they did).The Court found that promissory estoppel is a one-sided obligation, and not appropriate
in a business context.
§ 90 doesn't apply because
Gimbel was bargaining for an acceptance, not a bid.
offered to deliver linoleum to Baird in exchange for Baird's acceptance
of the offer, not for Baird's bid to the State of Pennsylvania."The offer could only
become a promise to deliver when Baird promised to take and pay for it."Therefore, the offer had not
been accepted when Gimbel canceled the offer.
case came up in the early days of promissory estoppel, and at the time it was mostly used for
charitable contributions and family situations.The Court at this time didn't feel that it was
appropriate in a business context.