## Facts

- Flathead County’s board of commissioners sought to buy a jaw-type rock crusher for the county road department and issued a call for bids.
- Modern Machinery submitted a written bid of $305,725.
- Westmont submitted the only other bids; they were cheaper but involved machines the road department considered inferior.
- After the road department inspected the options and recommended Modern’s machine, the commissioners met on September 14, 1979 and passed a recorded motion to purchase the crusher from Modern for $305,725.
- Shortly afterward, Westmont’s attorney delivered a protest letter to Commissioner Frank Guay threatening further action if the award was not vacated.
- Guay contacted Modern’s representative, Jim Fox, and told him to stop the order, repeating the request more than once.
- Guay later told Modern that the bid award was not final until the clerk and recorder’s office issued written letters accepting Modern’s bid and rejecting the others.
- Modern’s counsel asked the commissioners to provide a written direction stating whether Modern should proceed; Guay refused.
- Modern tendered delivery of the crusher on November 11, 1979, but Flathead County refused to accept it.
- On November 20, 1979, the county sent a letter rejecting all bids on the crusher.
- Modern resold the crusher to a third party for $186,499.86 and sued Flathead County for breach of contract.
- After a jury trial in February 1982, the jury found for Modern and awarded $10,000 in damages.
- Modern appealed, challenging the damages instructions and the sufficiency of the evidence supporting the amount awarded; Flathead County also challenged whether any valid contract existed.

## Issues

1. Whether Flathead County formed a binding contract with Modern Machinery when the commissioners voted and recorded a motion to purchase Modern’s crusher for $305,725.
2. Whether the jury was properly instructed on the measure of a seller’s damages under U.C.C. Article 2 after a buyer’s refusal to accept delivery.
3. Whether substantial credible evidence supported the jury’s $10,000 damages verdict.

## Decision

- The Montana Supreme Court held that a valid contract existed between Modern Machinery and Flathead County based on Modern’s bid (offer) and the commissioners’ recorded vote to purchase (acceptance).
- The court affirmed the judgment, concluding the jury instructions on damages, read as a whole, were not reversible error.
- The court affirmed the $10,000 damages award, holding it was supported by substantial credible evidence and the appellate court would not reweigh the proof or substitute its view of damages for the jury’s.

## Legal Principles

- Under Montana contract law, the essential elements of a contract include capable parties, consent, a lawful objective, and consideration; consent requires offer and acceptance.
- A written bid submitted in response to a call for bids is an offer; it becomes a contract when accepted by the offeree, including a public body acting through its board.
- A county’s acceptance may be shown by official action recorded in board minutes; a later claim that an internal clerical notice was still needed does not defeat contract formation where the board has already accepted the offer.
- Under U.C.C. Article 2, when a buyer wrongfully rejects or repudiates goods, the seller may recover damages that can include the difference between the contract price and a commercially reasonable resale price, plus allowable incidental damages, minus expenses saved.
- Alleged instructional error is evaluated by considering the instructions as a whole; a judgment will not be reversed absent prejudicial error.
- A jury’s damages award will be upheld on appeal if supported by substantial credible evidence, even if the record could also support a different amount.

## Conclusion

Modern Machinery held that Flathead County’s recorded vote to purchase the crusher accepted Modern’s bid and created a binding sales contract; the county’s later refusal to accept delivery constituted breach, and the Montana Supreme Court affirmed the jury’s $10,000 award after rejecting challenges to the damages instructions and to the evidentiary support for the verdict.


Modern Machinery v. Flathead County, 656 P.2d 206, 36 U.C.C. Rep. 395 (1982)