Elsinore Union Elementary School Dist. V. Kastoroff
54 Cal.2d 380, 6 Cal.Rptr. 1, 353 P.2d 713 (Cal 1960)
Kastoroff was a contractor that bid to add an addition to an
Elsinore school.As part of
the bidding process, Kastoroff made a math error in calculating his costs
and wound up significantly underbidding the project.Since he was by far the low
bidder, Elsinore awarded him the contract.
Kasteroff wrote the school board informing them of his error
and asking them to remove his bid.The school board refused at first but eventually relented.
The school board hired another contractor at a higher price,
and then sued Kasteroff to recover the difference.
The school board sought to cover for breach of contract, and to mitigate damages.
Trial Court found for Elsinore.
Appellate Court reversed the decision.
Appellate Court noted that the case of M.F. Kemper Constr. Co. v. City
of Los Angeles was very similar, and
that case held that a contractor making a clerical error in computing a
bid on a public work is entitled to rescind that bid.
error needs to be an excusable and honest mistake.If you made a mistake because you were negligent in your
calculations, the contract would still be enforceable.
bid was not so low that it was a palpable mistake.
mistakes are obvious to all sides
(like if Kastoroff had bid $9 instead of $90k).
have almost universally held that parties can get out of contracts that
have palpable mistakes.
Elsinore had not suffered any damages, to require Kasteroff to perform
for the mistaken amount would be unconscionable.
is no useful social purpose served by enforcing mistaken terms.
Court suggests three factors that helped Kastoroff win, even though the
error was not palpable.
reports the error promptly.
error was not so large as to be a burden on the other party.
with public entities are more forgiving than those with private