KII-Avoidance-FirstBaptistChurchOfMoultrie_v_BarberContractingCo by aiowmnyv




First Baptist Church of Moultrie v. Barber Contracting Co., Court of Appeals of GA, 1989 Was ∆ entitled to rescission of its bid due to a unilateral mistake? Issue Reasoning Rule
A just and reasonable man will not insist upon profiting by the other’s mistake. Where a mistake of one party at the time a K was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable by him if he does not bear the risk of the mistake under the rule stated in § 154, and a. the effect of the mistake is such that enforcement of the contract would be unconscionable, or b. the other party had reason to know of the mistake or his fault caused the mistake (1) To allow ∏ to take advantage of ∆ would not be just. (2) mistake amounted to 7% of total bid –that goes to the heart of the K. (3) No negligence – simple clerical error (4) ∏ was not prejudiced – it lost only what it sought to gain by taking advantage of ∆’s mistake. Barber promptly notified the Church. Mistake must arise from: i. Unintentional act; Omission; Error arising from ignorance; Surprise; Imposition; Misplaced confidence; Negligence if other party is not prejudiced A contractor may be relieved from a unilateral mistake in his bid by rescission under the proper circumstances. The prerequisites for obtaining such relief are: (1) the mistake is of such consequence that enforcement would be unconscionable; (2) the mistake must relate to the substance of the consideration; (3) the mistake must have occurred regardless of the exercise of ordinary care; (4) it must be possible to place the other party in status quo. It is also generally required that the bidder give prompt notification of the mistake and his intention to withdraw.

∏ solicited bids for a construction contract. ∆ submitted the lowest bid. The bidders were required to obtain a bid bond which amounted to $93K for ∆’s bid and which is payable to ∏ if the bidder failed to execute the K. The day the bids were open and ∆ told that they were the lowest bidders, they discovered an error $143K in calculations and informed ∏ the they were withdrawing their bids. ∏ disregarded the request and 9 days later forwarded a construction K to ∆ which they returned the next day un-executed. ∏ gave the K to the 2nd lowest bidder but still demanded that ∆ pay the bid bond. ∆ refused.

Held Procedure P argues D argues

∆’s summary judgment should’ve been granted. Trial court denied ∏’s and ∆’s summary judgment motions. They were negligent

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