## Facts

- The City of Moorhead solicited public bids for a wastewater treatment facility.
- Orville E. Madsen & Sons, Inc. (general contractor) requested subcontract bids, including from Holman Erection Company (steel erection subcontractor).
- Shortly before the general bid deadline, Holman phoned its steel erection bid to Madsen, consistent with common industry timing.
- Holman submitted the same bid to multiple general contractors competing for the project.
- In its bid to the City, Madsen used Holman’s price and listed Holman as the proposed steel erection subcontractor.
- Madsen was awarded the general contract but later awarded the steel erection work to Van Knight Steel Erection, Inc., citing minority business enterprise requirements and Van Knight’s ability to furnish additional labor and materials.
- Holman sued, claiming Madsen’s use and listing of Holman’s bid constituted acceptance, forming a binding subcontract that Madsen breached.

## Issues

1. Whether a general contractor’s use of a subcontractor’s bid price and listing of that subcontractor in a public bid constitutes acceptance that forms an enforceable subcontract.

## Decision

- The Minnesota Supreme Court affirmed summary judgment for Madsen.
- The court held no subcontract was formed because listing Holman and using its price did not objectively manifest acceptance or an intent to be bound.
- Absent additional assent (such as a communicated acceptance or executed subcontract), Holman had no enforceable contract claim.

## Legal Principles

- Contract formation requires an objective manifestation of mutual assent to definite terms.
- A general contractor’s incorporation of a subcontractor’s price and identification of the subcontractor in a public bid, standing alone, is not acceptance of the subcontractor’s offer.
- Public bid listing requirements do not, by themselves, convert a proposed subcontractor listing into a binding subcontract.
- In construction bidding, the need for post-award flexibility may be relevant in evaluating whether conduct objectively indicates an intent to be bound.

## Conclusion

The court held that a subcontractor cannot enforce a subcontract based solely on the general contractor’s use of the subcontractor’s bid and the subcontractor’s listing in the general bid; without additional objective evidence of acceptance, no contract arises.


Holman Erection Co. v. Orville E. Madsen & Sons, Inc., 330 N.W.2d 693 (Minn. 1983)