K.L. HOUSE CONSTR. CO. V. WATSON, 1973-NMSC-038,
84 N.M. 783, 508 P.2d 592 (S. Ct. 1973)
K. L. HOUSE CONSTRUCTION COMPANY, INC.,
Plaintiff-Appellee,
vs.
JAMES J. WATSON, d/b/a MESA ELECTRIC CO.,
Defendant-Appellant
SUPREME COURT OF NEW MEXICO
1973-NMSC-038, 84 N.M. 783, 508 P.2d 592
Appeal from the District Court of
Bernalillo County, Larrazolo, Judge
HANNETT, HANNETT, CORNISH & BARNHART,
Albuquerque, N.M., Attorneys for Appellee.
KELEHER & McLEOD, WILLIAM K.
STRATVERT, DON A. RUST, Albuquerque, N.M., Attorneys for Appellant.
McMANUS, Chief Justice, wrote the opinion.
LaFel E. Oman, J., Donnan Stephenson, J.
{*784} McManus, Chief
Justice.
{1} The University of New
Mexico, intending construction on its Electrical Engineering Building, sought
funds from the federal government and construction bids from a number of
general contractors. K. L. House Construction Company (contractor), in order to
prepare its bid to the university, sought bids from a number of subcontractors.
James J. Watson d/b/a Mesa Electric Company (subcontractor), in order to
prepare its bid to contractor, sought price quotations from a number of
suppliers. Thus it was that suppliers quoted their prices, subcontractor
submitted his bid, and contractor submitted its bid to the university.
{2} It is important to
understand the situation at this point, a situation distinguishable from Stites
v. Yelverton,
60 N.M. 190,
289 P.2d 628 (1955), relied upon by contractor.
Stated simply, the university did not wish to give its unconditional commitment
to the contractor until it was assured of federal funding. Contractor did not
wish to give its unconditional commitment to subcontractor until it had an
unconditional commitment from the University. Subcontractor did not wish to
give his unconditional commitment to his suppliers until he had an
unconditional commitment from contractor.
{3} Fortunately, the
university received its funding and gave a written contract to contractor on
June 5, 1967.
{4} Unfortunately, contractor
did not give subcontractor a written contract until June 21, 1967. This was
unfortunate for the following reasons.
{5} First, use of the
subcontractor's bid by the contractor did not constitute an unconditional
acceptance. Tatsch v. Hamilton-Erickson Manufacturing Co.,
76 N.M. 729,
418
P.2d 187 (1966).
{6} Second, contractor's
having asked the subcontractor to proceed with preliminary planning cannot be
construed as the unconditional acceptance which subcontractor needed before he
could make a commitment to his suppliers.
{7} Third, subcontractor had
expressly limited the firm prices in his bid to a period of 30 days from May
10, 1967, the bid date. He testified that this was because many of his
suppliers would not give him assurances on their prices for longer than 30
days.
{8} Fourth, subcontractor
wrote a letter to contractor, received on June 14, 1967, which revoked the
original bid and substituted a new, more expensive bid. An offer not under seal
or given for consideration may be withdrawn at any time prior to unconditional
{*785} acceptance by offeree. Tatsch, supra.
{9} We conclude that there
was no unconditional acceptance before revocation as required by Tatsch, supra,
wherein the court said:
"A binding contract would result between the parties
here only if Tatsch unconditionally accepted Hamilton's offer before it was
withdrawn. Polhamus v. Roberts, 50 N.M. 236, 175 P.2d 196, 170 A.L.R. 991. The
Supreme Court of Utah in R.J. Daum Const.Co. v. Child, 122 Utah 194, 247 P.2d
817, succinctly stated the means by which such an acceptance must be made
manifest, thusly:
"' * * * Such an acceptance requires manifestation of
unconditional agreement to all of the terms of the offer and an intention to be
bound thereby. Such manifestation may be either written or oral or by actions
and conduct or a combination thereof, but regardless of the form or means used,
there must be made manifest a definite intention to accept the offer and every
part thereof and be presently bound thereby without material reservations or
conditions. * * * '"
{10} The trial court
concluded that there was an acceptance.
{11} We must reverse. IT IS
SO ORDERED.