Equity May Allow Contractor Who Submits an Incorrect Bid for Public Contract to Rescind Bid Without Forfeiting Bid Bond

Boise Jr. Coll. Dist. v. Mattefs Constr. Co., 92 Idaho 757, 450 P.2d 604 (1969)

Mattefs Construction submitted a bid for the construction of a building for Boise Junior College.  The bid contained a clerical error that omitted one item that constituted 14 percent of the bid.  The court held a contractor is entitled to the equitable relief of rescission if he can establish the following conditions:  “(1) the mistake is material; (2) enforcement of a contract pursuant to the terms on an erroneous bid would be unconscionable; (3) the mistake did not result from violation of a positive legal duty or culpable negligence; (4) the party to whom the bid is submitted will not be prejudiced except by loss of his bargain; and (5) prompt notice of the error is given.”  The court concluded that the clerical error in submitting a bid, which was 14 percent of the total bid, was substantial and material and did not result from culpable negligence.  The court further found that Boise Junior College would not suffer a substantial hardship since Mattefs informed them of the error before they had attempted to accept the offer.  The court did note that not all mistakes entitle a bidder to withdraw his bid, but distinguished this case on the basis that this was a clerical error and not an error in judgment, such as underestimating cost or labor.  Since the court found Mattefs satisfied all five factors, equity required the bid to be withdrawn without forfeiting the bid bond.