Drennan v. Star Paving Co.

Last updated
Drennan v. Star Paving Company
Seal of the Supreme Court of California.svg
Decided Dec 31, 1958
Full case nameWilliam A. Drennan, respondent, v. Star Paving Company (a Corporation), Appellant
Citation(s) 51 Cal. 2d 409 (1958)
Case history
Prior historyDefendant appealed a judgment for plaintiff in a contracts action
Subsequent historynone
Holding
Judgment affirmed for plaintiff.
Court membership
Chief Justice Phil S. Gibson
Associate Justices John W. Shenk, Roger J. Traynor, B. Rey Schauer, Homer R. Spence Marshall F. McComb
Case opinions
MajorityTraynor, joined by Shenk, Gibson, Schauer, Spence, McComb

Drennan v. Star Paving Company, 51 Cal. 2d 409 (1958), was a California Supreme Court case in which the court held that a party who has detrimentally relied on an offer that is revoked prior to acceptance may assert promissory estoppel to recover damages. [1]

Contents

Background

William A. Drennan, a general contractor, had gotten a bid from Star Paving, a subcontractor for a construction job and had included Star Paving's bid number in his total bid. Drennan won the contract to build the Monte Vista Elementary School for the Lancaster School District based on that bid. Subsequently, Star Paving contacted him to say that its initial bid had been approximately $7000 short, and that it would not be able to complete the project for the amount of money it had previously specified. After finding an alternative subcontractor to complete the job, Drennan sued Star Paving for the difference between its bid and the cost.

Opinion of the Court

Judge Roger J. Traynor, writing for the California Supreme Court, held that the plaintiff's reliance on defendant's bid, as well as defendant's failure to indicate that the bid was revocable before acceptance, meant that defendant was responsible for providing the service at the price initially specified.

Impact

In contracts courses this case is often contrasted with James Baird Co. v. Gimbel Bros. , a 1933 case with similar facts from the Second Circuit decided by Judge Learned Hand. Hand held that an offeror was free to revoke the offer prior to acceptance; twenty-five years later, when the doctrine of promissory estoppel had found wider acceptance, Traynor held that the offer was irrevocable once the offeree had relied upon it. [2]

Related Research Articles

Collateral estoppel (CE), known in modern terminology as issue preclusion, is a common law estoppel doctrine that prevents a person from relitigating an issue. One summary is that, "once a court has decided an issue of fact or law necessary to its judgment, that decision ... preclude[s] relitigation of the issue in a suit on a different cause of action involving a party to the first case". The rationale behind issue preclusion is the prevention of legal harassment and the prevention of overuse or abuse of judicial resources.

Estoppel Preventive judicial device in common law

Estoppel is a judicial device in common law legal systems whereby a court may prevent or "estop" a person from making assertions or from going back on his or her word; the person being sanctioned is "estopped". Estoppel may prevent someone from bringing a particular claim. Legal doctrines of estoppel are based in both common law and equity. It is also a concept in international law.

<i>Central London Property Trust Ltd v High Trees House Ltd</i> Legal doctrines of promissory estoppel

Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 is a famous English contract law decision in the High Court. It reaffirmed and extended the doctrine of promissory estoppel in contract law in England and Wales. However, the most significant part of the judgment is obiter dicta as it relates to hypothetical facts; that is, the landlord did not seek repayment of the full wartime rent.

Roger J. Traynor American judge

Roger John Traynor was the 23rd Chief Justice of California (1964-1970) and an Associate Justice of the Supreme Court of California from 1940 to 1964. Previously, he also had served as a Deputy Attorney General of California under Earl Warren, and an Acting Dean and Professor of UC Berkeley School of Law. He is widely considered to be one of the most creative and influential judges as well as legal scholars of his time.

Estoppel in English law is a doctrine that may be used in certain situations to prevent a person from relying upon certain rights, or upon a set of facts which is different from an earlier set of facts.

The posting rule is an exception to the general rule of contract law in common law countries that acceptance of an offer takes place when communicated. Under the posting rule, that acceptance takes effect when a letter is posted. In plain English, the "meeting of the minds" necessary to contract formation occurs at the exact moment word of acceptance is sent via post by the person accepting it, rather than when that acceptance is received by the person who offered the contract.

Offer and acceptance Two components of agreement

Offer and acceptance are generally recognised as essential requirements for the formation of a contract, and analysis of their operation is a traditional approach in contract law. The offer and acceptance formula, developed in the 19th century, identifies a moment of formation when the parties are of one mind. This classical approach to contract formation has been modified by developments in the law of estoppel, misleading conduct, misrepresentation, unjust enrichment, and power of acceptance.

<i>R v Ron Engineering and Construction (Eastern) Ltd</i> Supreme Court of Canada case

R v Ron Engineering and Construction (Eastern) Ltd, of 1981 is the leading Supreme Court of Canada decision on the law of tendering for contracts. The case concerned the issue of whether the acceptance of a call for tenders for a construction job could constitute a binding contract. The Court held that indeed in many cases the submission of an offer in response to a call for tenders constitutes a contract separate from the eventual contract for the construction. With the release of the decision, the tendering process practiced in Canada was fundamentally changed.

Cohen v. Cowles Media Co., 501 U.S. 663 (1991), was a U.S. Supreme Court case holding that the First Amendment freedom of the press does not exempt journalists from generally applicable laws.

The Lancaster School District is a school district that serves a major part of the city of Lancaster, California (USA).

Northern Liberty Market Co. v. Kelly, 113 U.S. 199 (1885), was a writ of error to reverse a judgment for the defendant in an action brought on April 4, 1884, by a corporation formed for the purpose of erecting a markethouse in the City of Washington and carrying on a marketing business there, upon twenty promissory notes made by him to the plaintiff, dated January 1, 1875.

<i>Waltons Stores (Interstate) Ltd v Maher</i>

Waltons Stores (Interstate) Ltd v Maher, is a leading case in Australian contract law. The Australian High Court decided that estoppel, in certain circumstances could be a cause of action.

Stevenson, Jaques, & Co v McLean [1880] 5 QBD 346 is an English contract law case concerning the rules on communication of acceptance by telegraph. Its approach contrasts to the postal rule.

United States contract law

Contract law regulates the obligations established by agreement, whether express or implied, between private parties in the United States. The law of contracts varies from state to state; there is nationwide federal contract law in certain areas, such as contracts entered into pursuant to Federal Reclamation Law.

Escola v. Coca-Cola Bottling Co., 24 Cal.2d 453, 150 P.2d 436 (1944), was a decision of the Supreme Court of California involving an injury caused by an exploding bottle of Coca-Cola. It was an important case in the development of the common law of product liability in the United States, not so much for the actual majority opinion, but for the concurring opinion of California Supreme Court justice Roger Traynor.

<i>Crabb v Arun DC</i> English land and contract law case

Crabb v Arun District Council [1975] EWCA Civ 7 is a leading English land law and contract case concerning "proprietary estoppel". Lord Denning MR affirmed that where agreements concern the acquisition of rights over land, there is no need for both parties to provide a consideration for upholding the bargain. While promissory estoppel cannot found a cause of action it was held that in the peculiar situation of land, consideration is not necessary at all.

Proprietary estoppel

Proprietary estoppel is a legal claim, especially connected to English land law, which may arise in relation to rights to use the property of the owner, and may even be effective in connection with disputed transfers of ownership. Proprietary estoppel transfers rights if,

Collier v P & MJ Wright (Holdings) Ltd[2007] EWCA 1329 is an English contract law case, concerning the doctrine of consideration and promissory estoppel in relation to "alteration promises".

<i>Commonwealth v Verwayen</i>

Commonwealth v Verwayen, also known as the Voyager case, is a leading case involving estoppel in Australia. Bernard Verwayen sued the Australian government for damages caused by a collision between two ships of the Australian Navy. A representative of the Government initially indicated to Bernard Verwayen that the Government would not raise the statute of limitations as a defence to their negligence. In court however, the Government relied on this defence. While the decision of the High Court was split, a majority of judges found that the Government could not rely on this statement as a defence. Justices Toohey and Gaudron came to this conclusion on the basis that the Government had waived their right to rely on this defence. However, Justices Deane and Dawson came to this conclusion under the doctrine of estoppel, which provides that a defendant can not contradict a previous representation or promise made that has established an assumed state of legal affairs. This case is most frequently referred to in relation to its influence on the doctrine of estoppel.

Power of acceptance

Power of acceptance is a concept of contract law. It refers to the power vested in the offeree by the offeror through the offer being made. It is used to determine whether the acceptance of an offer is valid.

References

  1. Drennan v. Star Paving Company., 51Cal.2d409 , 417(1928).
  2. Goldberg, Victor P. (2011). "Traynor (Drennan) versus Hand (Baird): Much Ado About (Almost) Nothing" (PDF). Journal of Legal Analysis.[ dead link ]