Respondent company brought an action against appellant city to cancel a bid it had submitted on public construction work and to obtain discharge of its bid bond. The city cross-complained for forfeiture of the bond and for damages. The Superior Court of Los Angeles County (California) cancelled the bid, discharged the bond, and allowed the city nothing on its cross-complaint. The city appealed.
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Overview
After the bids were opened but before the city board accepted the bid, the company notified the city of a significant error in its bid. The city then accepted the bid as originally submitted. On appeal, the issue was whether the company was entitled to rescission on the ground of unilateral mistake. The court held that the company was entitled to rescission. The court could not say as a matter of law that the error constituted a neglect of legal duty such as would bar the right to equitable relief. The court reasoned that where a person was denied relief because of an error in judgment, the agreement which was enforced was the one he or she intended to make, whereas if he or she was denied relief from a clerical error, he or she was forced to perform an agreement he or she had no intention of making. There was no reason for denying relief on the ground that the city could not be restored to status quo because the city had ample time in which to award the contract without readvertising and the contract was actually awarded to the next lowest bidder.
Outcome
The court affirmed the judgment of the superior court that cancelled the bid, discharged the bond, and allowed the city nothing on its cross-complaint.