Bid Shopping by using the bid but not the subcontractor
Can a general contractor use a subcontractor’s bid to secure a project and then not use that subcontractor on the job? This is referred to as bid shopping and it may seem unfair but an appellate court has said yes, and ruled in favor of the general contractor.
The real issue was whether a contract was ever formed between the two parties. Language in the subcontractor’s proposal did state its bid was being submitted with the understanding that if it was used by the general contractor, then that would create a binding contract between the parties. But was saying that enough to create a binding agreement? Neither party had actually signed the proposal. Nor was there any evidence that the general contractor orally accepted the subcontractor’s terms, orally or otherwise. For there to be an enforceable construction contract, you must have these essential elements:
- Were both parties competent – did they have the mental capacity to enter into the contract?
- Was there a meeting of the minds – was an offer from one party accepted by the other party?
- Did the parties exchange consideration – was something of value given in exchange for goods or services?
What happened here was that an offer was made but never formally accepted.
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