What in fact were the implications of the owners adoption of a motion to accept subject to approval of the Housing Authority?.
A certified check or bank draft …or a satisfactory bid bond executed by the bidder and acceptable sureties in an amount equal to 5 percent of the bid, shall be submitted with each bid.
2. No bid shall be withdrawn for a period of thirty days, subsequent to opening of bids without the written consent of Hazelhurst.
Iveys bid was low and was accompanied by a bid bond. On the day following the opening of bids, Ivey discovered an error (which was not obvious), he advised the owner in writing of the error, and withdrew its bid. The owner had not yet accepted the bid but had adopted a motion to accept “subject to approval of the Public Housing Administration.” The owner called on Iveys bid bond and contracted with the next lowest bidder. However, the surety for Iveys bond, disputes the owners action arguing that there was no liability on the part of the bidder Ivey and hence none on the part of the surety.
Task: Carefully analyze the positions of the parties in this dispute. What legal issues are involved in this dispute? Who should prevail and why? Would it have made any difference to the owners position, if it had paid a nominal sum to each bidder to hold the bid irrevocable for a fixed period as directed in the invitation for bids? What, in fact, were the implications of the owners adoption of a motion to accept subject to approval of the Housing Authority?
Case # 2
City of Seattle v. Dyad Construction Inc. ( 565 P.2d 423)
Background: This dispute occurred over a contract involving a sewer line project. The contract included provisions that stated that delays were to be compensated” for a period equivalent to work time lost.” The sewer line was being installed along Seola Beach, with the trench being dug through sand and gravel in tidal flats as staked out by the City survey crew. The path of the trench ran between the base of a bluff on one side and the tidal flats on the other. The work could be performed only during favorable low tide. During the trenching operation a landslide occurred behind the backhoe performing the excavation work. Dyad stopped work and asked the City to redesign the alignment of the pipeline so that it was further out on the beach. The Washington State Labor and Industries safety inspector also considered the project unsafe. Eight months later the City approved a new plan for the sewer line location. The project was completed 4 months behind the original schedule. Dyad sued for damages caused by the delay, which occurred through no fault of its own. The City claimed that the contract was clear and that the contractor was entitled only to a time extension. Dyad claimed that the provision dealt with only foreseeable delays at the time the contract was signed. Not only were the delays that were encountered unforeseeable, they were of unreasonable length.
Task: Carefully analyze the positions of the parties in this dispute. Be sure to succinctly identify the issue(s) in dispute. If you were the presiding judge, in this case how would you rule and why?
CASE # 3:
Massachusetts Bonding and Insurance Co. v. Lentz, 9 P.2d 408( Ariz. S.C. 1932)
Background: A contractor entered into a written agreement to construct a building according to plans a specifications prepared by the Architect, Nolan. It was expressly stipulated that the owner should not be liable for any extras or additions to the contract unless pursuant to a written order signed by the owner or a written order from the architect stating that the owner has authorized the change.
The architect orally approved some changes which were performed by the contractor. The contractor seeking to recover for these extras filed a court action arguing that the architect was acting as agent for the owner, and therefore the owner was bound by the requests for extras made by the architect.
Task: If you were the presiding judge, how would you rule in this case and why?
Would your decision have been different if the architect had signed the orders and stated that the owner had authorized them? In the latter case, would the owner have had any recourse? Explain.
Does the contractor have any recourse against the architect?
How would the contractor prove that the owner had waived the provision of the contract?
