## Facts

- A Pennsylvania public agency solicited bids for a public construction project, and James Baird Co. prepared a prime-contractor bid.
- Gimbel Bros., Inc. sent written price offers to multiple contractors to supply all required linoleum for the project at stated lump-sum prices.
- Gimbel’s estimate was mistaken, understating the required quantity by about half.
- James Baird Co. received Gimbel’s offer and used the quoted prices in its own prime bid submitted the same day.
- After discovering the mistake, Gimbel telegraphed a withdrawal of the original offer (and proposed higher prices); the withdrawal reached Baird before Baird attempted any formal acceptance.
- Baird’s prime bid was later accepted by the public agency.
- After award of the prime contract, Baird attempted to accept Gimbel’s original offer; Gimbel refused to perform, asserting the offer had been revoked.
- Baird sued for breach of an alleged contract to sell and deliver linoleum.

## Issues

1. Whether Gimbel’s linoleum bid became a binding contract despite Gimbel’s revocation being received before Baird’s attempted acceptance.
2. Whether Baird’s reliance on Gimbel’s bid in computing and submitting its prime bid made Gimbel’s offer irrevocable or otherwise enforceable under promissory estoppel.

## Decision

- The Second Circuit affirmed judgment for Gimbel.
- No contract was formed because the offer was effectively revoked before acceptance.
- Baird’s use of the quoted prices in its own bid was not an acceptance of Gimbel’s offer.
- The court rejected enforcing the offer via promissory estoppel based solely on Baird’s reliance.
- No option contract arose because Baird gave no consideration for a promise to keep the offer open.

## Legal Principles

- An offer is generally revocable at any time before acceptance unless made irrevocable by consideration, statute, or a valid option mechanism.
- Using a subcontractor’s bid as an input in a prime contractor’s bid does not, by itself, constitute acceptance of the subcontractor’s offer.
- A revocation is effective when received by the offeree; once received before acceptance, the power of acceptance terminates.
- In a commercial bidding context, pre-acceptance reliance on an offer does not automatically convert the offer into an enforceable option or support promissory estoppel where the offer is part of a bargain and lacks consideration to remain open.

## Conclusion

The court held that the supplier’s mistaken bid was revoked before any acceptance and therefore created no contract, and it declined to treat the general contractor’s reliance in preparing its own bid as a basis to impose an option-like obligation or promissory estoppel liability on the supplier.


James Baird Co. v. Gimbel Bros., Inc., 64 F.2d 344 (2d Cir. 1933)