## Facts

- Clark & Sullivan Constructors, Inc. (C&S) prepared a prime bid for a public works project at the University Medical Center in Las Vegas and solicited subcontractor quotations.
- Dynalectric Co. of Nevada, Inc. (Dynalectric) submitted an electrical subcontract bid of \$7,808,983.
- C&S used Dynalectric’s quoted price in compiling its prime bid and was awarded the project.
- After award, Dynalectric refused to perform on its bid.
- C&S hired replacement electrical subcontractors at a higher total cost.
- C&S sued Dynalectric, including on a promissory estoppel theory; the district court found for C&S and awarded \$2,501,615, calculated as the difference between Dynalectric’s bid and what C&S paid the replacement subcontractors.
- Dynalectric appealed solely on the measure of damages, not liability.

## Issues

1. What measure of damages is proper in promissory estoppel when a general contractor reasonably relies on a subcontractor’s bid to secure a prime contract and the subcontractor later repudiates?
2. Whether awarding the difference between the subcontractor’s bid and the replacement subcontractors’ cost is justified by what justice requires and by the foreseeability and certainty of the claimed damages.

## Decision

- The Nevada Supreme Court affirmed the judgment for C&S.
- The court held that the presumptive promissory estoppel measure in this construction-bid setting is the difference between the nonperforming subcontractor’s bid and the cost of replacement performance.
- The court concluded the district court’s \$2,501,615 award was foreseeable, reasonably certain, and necessary to avoid injustice given C&S’s reliance.

## Legal Principles

- In promissory estoppel, the remedy is determined by what justice requires, considering the foreseeability and certainty of the damages sought.
- When a subcontractor knows or should know its bid will be used in a general contractor’s prime bid, and the general contractor reasonably relies, promissory estoppel may supply a remedy if the subcontractor later refuses to perform.
- In general contractor–subcontractor bid reliance cases, a presumptive damages measure is the bid-to-cover difference: the gap between the original bid and the cost of substitute performance.
- Promissory estoppel damages are constrained by traditional limits, including foreseeability and reasonable certainty.

## Conclusion

The court upheld an award measured by the increased cost of substitute subcontractor performance, holding that in bid-reliance promissory estoppel cases this bid-to-cover difference is the presumptive damages measure when the loss is foreseeable and can be proven with reasonable certainty.


Dynalectric Co. of Nev., Inc. v. Clark & Sullivan Constructors, Inc., 127 Nev. 480, 255 P.3d 286 (Nev. 2011)