## Facts

- Pennsylvania Blue Shield solicited bids to lease a computer, requiring receipt in Harrisburg by 12:00 noon on August 18, 1975.
- Universal Computer Systems prepared a bid but, shortly before the deadline, sought help with delivery to ensure timely receipt.
- Universal’s president called Blue Shield employee Joel Gebert, identified as Blue Shield’s liaison with prospective bidders, and asked if Blue Shield could pick up the bid at the Harrisburg airport on the morning of August 18.
- Gebert assured Universal the bid would be picked up at the airport and delivered to Blue Shield before the noon deadline.
- Universal sent the bid via Allegheny Airlines’ PDQ service to Harrisburg and provided flight details to Gebert.
- The bid arrived in Harrisburg, but Gebert did not retrieve it; the bid was not delivered by noon and was not considered.
- Universal claimed it lost the opportunity to obtain the contract and sought damages based on reliance on Gebert’s assurance.

## Issues

1. Whether Blue Shield was bound under promissory estoppel based on an employee’s promise to retrieve and timely deliver a bid.
2. Whether the employee had apparent authority, such that Universal’s reliance on the promise was reasonable under Pennsylvania law.
3. Whether the district court properly granted judgment notwithstanding the verdict (JNOV) and whether a new trial was required on damages.

## Decision

- The Third Circuit reversed the district court’s grant of JNOV.
- The court held that evidence permitted the jury to find Gebert had apparent authority to make the promise and that Universal reasonably relied to its detriment.
- The court reinstated the jury’s $13,000 verdict against Blue Shield.
- The cross-appeal seeking a new trial on damages did not warrant relief in light of the reinstated verdict and the trial court’s conclusion that the award was supported.

## Legal Principles

- Under Pennsylvania law, promissory estoppel may bind a principal when a promise induces reasonable detrimental reliance, even without a finalized contract.
- Apparent authority may be established by a principal’s placement of an employee in a role (such as bidder liaison) that reasonably signals authority to make process-related commitments to third parties.
- Reasonableness of reliance and the existence of apparent authority are ordinarily fact questions for the jury; JNOV is improper unless the evidentiary record is so deficient that no reasonable jury could find liability.
- The presence of formal bid requirements or regulatory constraints does not automatically defeat apparent authority or reliance as a matter of law where the principal’s conduct created an appearance of authority.

## Conclusion

The Third Circuit held that a bidder could recover under promissory estoppel where the bid-soliciting entity, through an employee held out as liaison, made an assurance about timely bid delivery on which the bidder reasonably relied, and it reinstated the jury’s damages award.


Universal Computer Systems, Inc. v. Medical Services Ass’n of Pa., 628 F.2d 820 (3d Cir. 1980)