## Facts

- General Motors (GM) solicited bids for construction of a central air-conditioning plant at its proving grounds near Mesa, Arizona.
- Walter Burr, doing business as Burr Sons Construction Co., prepared a bid for the prime contract and solicited electrical subcontract bids.
- Corbin-Dykes Electric Co. submitted an electrical subcontract bid; Burr used that bid in calculating and submitting his prime bid to GM.
- GM rejected the first round of prime bids as too high and rebid the project.
- In the rebid, Burr again used Corbin-Dykes’ electrical number in his prime bid but also received a matching bid from Sands Electric Company that offered an additional $4,000 reduction if Sands could coordinate work with an existing proving-grounds project.
- Burr won the prime contract in the second round; Sands’ $4,000 contingency was satisfied, and Burr awarded the electrical subcontract to Sands.
- Corbin-Dykes sued Burr for breach of an alleged subcontract, asserting that Burr’s use of its bid (and alleged trade custom) obligated Burr to award Corbin-Dykes the electrical subcontract.
- The trial court granted summary judgment for Burr; Corbin-Dykes appealed.

## Issues

1. Whether summary judgment was proper where the subcontractor claimed a contract arose from submission of its bid and the general contractor’s inclusion of that bid in the successful prime bid.
2. Whether trade custom and usage can supply acceptance (or otherwise create a subcontract) when the general contractor did not expressly accept the subcontractor’s bid.
3. Whether promissory estoppel bound the general contractor to award the subcontract to the subcontractor based on the general contractor’s use of the bid.

## Decision

- The Court of Appeals of Arizona affirmed summary judgment for Burr.
- Corbin-Dykes’ bid was an offer that did not become a contract because Burr never voluntarily accepted it.
- Burr’s inclusion of Corbin-Dykes’ bid in the prime bid did not constitute acceptance of the subcontract offer.
- Evidence of trade custom and usage could not create a contract or infer acceptance where no agreement otherwise existed.
- Promissory estoppel did not apply because Burr made no promise that the subcontract would be awarded to Corbin-Dykes upon receipt of the prime contract.
- With no genuine dispute of material fact on acceptance or any alternative basis for liability, Burr was entitled to judgment as a matter of law.

## Legal Principles

- A binding contract requires offer, voluntary acceptance, and mutual assent shown by a clear manifestation of intent to be bound.
- A subcontractor’s bid to a general contractor is ordinarily an offer; the general contractor’s use of the bid in a prime bid, without more, is not acceptance.
- Trade custom and usage may aid in interpreting an existing, ambiguous agreement, but cannot create assent or form a contract where none exists.
- Promissory estoppel requires a promise; absent a promise of award or acceptance, a subcontractor cannot use promissory estoppel to compel formation of a subcontract.
- Summary judgment is appropriate where the evidence, even viewed favorably to the nonmovant, shows no triable issue on contract formation.

## Conclusion

The court held that no subcontract arose from a subcontractor’s bid merely because the general contractor used that bid in a successful prime bid, and neither alleged trade custom nor promissory estoppel supplied the missing acceptance; summary judgment for the general contractor was affirmed.


Corbin-Dykes Electric Co. v. Burr, 18 Ariz. App. 101, 500 P.2d 632 (Ct. App. 1972)