Friday, March 23, 2012

Janke Construction Co. v. Vulcan Materials Co. case brief

Janke Construction Co. v. Vulcan Materials Co.; (7th Cir., 1976); CB 599; Notes 35
Promissory estoppel fills the gap between offer and acceptance
  • Facts: D, subcontractor, provided P, general contractor, with a quote for piping, which P relied on for his prime bid. After D awarded K, P said that pipes would be different specs than required. Did not meet specifications, rejected by project engineers. P had to get pipes from another subcontractor, cost $39k more.
  • Issue: is the bid enforceable?
  • Holding: Ct said no acceptance of P’s part, so no K. BUT Court invokes doctrine of promissory estoppel. Judgment for P – recovered reliance damages of $39k.
  • Rule: Promissory estoppel, Rsmt § 90. To prevail in an action under § 90, P must establish: (1) a definite promise was made by the D with the reasonable expectation that it would induce action of a definite and substantial character on P’s part; (2) that P had acted in justifiable reliance upon the promise to its detriment; (3) that injustice can be avoided only by enforcement of the promise.
  • Commentary: 2nd issue of whether statute of frauds is a defense to claim based on theory of promissory estoppel. It’s not b/c the SoF relates to the enforceability of contracts; promissory estoppel relates to promises which have no contractual basis and are enforced only when necessary to avoid injustice.
  • Rstmt solution: § 87: Option Contracts

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