No. 82-265 

IN THE SUPREME COURT OF TfIE STATE OF MONTANA 

1982 

MODERN MACHINERY, 

Plaintiff and Appellant, 

-vsFLATHEAD COUNTY, 

Defendant and Respondent. 

.1 from: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, The Honorable 

Douglas G. Harkin, Judge presiding. 

Counsel of Record: 

For Appellant: 

James D. Moore, Kalispell, Nontana 

For Respondent : 

Gary R. Christiansen, Kalispell, Montana 

Ted 0. Lympus, County Attorney, Kalispell, Montana 

Submitted on Briefs: Xovember 24, 1982 

~ecided: December 29, 1982 

Filed: FJE C 2 ,; '1582 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

Plaintiff brought this action for breach of contract in the 

Eleventh Judicial District in Flathead County. A jury trial commenced in Kalispell, Montana, on February 24, 1982. On February 

26, 1982, the jury returned a verdict awarding plaintiff $10,000. 

Plaintiff and defendant appeal from the judgment entered upon the 

jury's verdict. 

On or about July 30, 1979, the Flathead County commissioners 

issued a call for bids for the purchase of a jaw-type rock 

crusher to be used by the Flathead County road department. The 

commissioners received three bids in response to the call, one 

from plaintiff in the amount of $305,725 and two from another 

Kalispell distributor, Westmont; one for $201,193 and the other 

for $200,870. On August 22, 1979, the day the bids were opened, 

the commissioners voted to take the bids under advisement pending 

recommendation of the county road department. Representatives 

from the road department and Commissioner Frank Guay then flew to 

Cedar Rapids, Iowa, with plaintiff's agent, Jim Fox, to view 

plaintiff 's crusher. Commissioner Guay and the representatives 

from the road department were impressed with features contained 

on plaintiff's crusher which were not available on Westmont's 

models. 

On September 14, 1979, the commissioners met with members of 

the road department and Jim Fox to discuss the crusher bids. The 

road department recommended that the commissioners purchase 

plaintiff's crusher. Commissioner Guay then made a motion to 

accept the road department's recommendation. The motion was 

seconded by Commissioner Joan Deist. The motion was recorded in 

the minutes of the meeting as follows: 

"Motion to Guay to accept the Road Department's recommendation to purchase gravel 

crusher from Modern Machinery for $305,725. 

The only other bid being received having been 

for used power plant generator contained in a 

second unit not attached to the crusher 

itself, thereby creating operational problems. 

Motion seconded by Joan A. Deist, motion 
carried. Note :, Me1 Wollan votes no on 

crusher bid as the lower bid for a jaw crusher 

was very adequate and a savings of $100,000." 

Everyone in attendance at the meeting who testified at the 

trial felt that the county was going to eventually purchase 

plaintiff Is crusher. On September 17 the following Monday, an 

attorney representing Westmont delivered a letter to commissioner 

Frank Guay which requested that the award to plaintiff be vacated 

or he would seek to enforce Westmont's rights in the matter by 

whatever means permitted by law. Guay then called Jim Fox in 

Missoula and told him if the crusher had been ordered from the 

factory, to have the order stopped. 

On Wednesday, Fox and another representative for plaint iff, 

Larry Exe, met Guay in Helena, Montana, to discuss the crusher. 

Guay testified at trial that he again told Fox and Exe to stop 

order on the crusher if it had, in fact, been ordered. Fox and 

Exe testified that the meeting in Helena was mainly to discuss 

the political ramifications to Guay should the sale be completed. 

After the meeting in Helena, Exe called the factory to see how 

far they had progressed on the order. Exe told the factory to 

let him know how much expense would be incurred if plaintiff was 

to stop order on the crusher at that time. That was the last 

contact plaintiff had with the factory concerning a stop order on 

the crusher. 

FOX, Guay and Exe then met with Assistant County Attorney, 

Charles Kuether , at the Flathead County commissioner's off ice. 

Again, Guay told plaint iff 's representatives not to order the 

crusher. Guay stated that the bid award was not final until the 

clerk and recorder's off ice issued a letter accepting plaintif f's 

bid and rejecting all other bids. A second meeting with Kuether 

followed attended by Fox, Exe , Guay and plaintiffls attorney. 

Again, Guay stated the bid award was not final until the clerk 

and recorder's office issued notice of the successful bid. 

Plaintiff 's counsel requested a letter directing plaintiff to 

either order or stop order on the crusher. Guay ref used to draft 
such a letter stating that since the commissioners had not formally ordered the crusher it was not necessary to rescind an 

order. That was the last meeting between plaintiff and the 

commissioner's off ice. 

On November 11, 1979, plaintiff tendered the crusher to 

Flathead County pursuant to the statement in the call for bids 

that delivery must be within forty-five days from date of order. 

The county refused to accept delivery of the machine. On 

November 20, 1979, the commissioners met and issued a letter to 

plaintiff stating they had decided to reject all bids received in 

response to its call for bids on the rock crusher. Plaintiff 

subsequently transported the crusher to Tempe, Arizona, where it 

was finally sold. On December 11, 1979, plaintiff filed a 

complaint in the District Court of the Eleventh Judicial 

District, in and for the County of Flathead, against Flathead 

County alleging breach of contract. After a jury trial commencing February 24, 1982, the jury returned a verdict in favor 

of plaintiff assessing damages in the amount of $10,000. 

Plaintiff then filed this appeal and defendant cross-appeals . 

The substance of the appeals is as follows: 

1. Whether there was a valid contract. 

2. Whether the jury was properly instructed on the measure 

of damages. 

3. Whether the jury verdict was supported by substantial 

credible evidence. 

The essential elements of a contract are: parties capable of 

contracting, consent, a lawful objective, and consideration. 

Section 28-2-102, MCA; Keil v. Glacier Park Inc. (1980), 

Mont . -- - , 614 P.2d 502, 505, 37 St.Rep. 1151. In this case the 

issue of whether or not there was a contract goes to the requirement of consent. There is consent to contract when there has 

been an offer and acceptance of the offer. 

Here, plaintiff Is written bid issued in response to Flathead 

County's call for bids constitutes an offer. However, a written 
bid has consistently been construed as nothing more than an offer 

to perform labor or supply materials, and the offer does not 

ripen into a contract until accepted by the offeree. Carriger v. 

Ballenger (1981) , - - -- -- Mont . - - - - , 628 P.2d 1106, 1108, 38 

St.Rep. 864. Thus, we must determine whether the Flathead County 

commissioners accepted plaintiff Is offer thereby creating a 

contract. 

After the bids were opened, the commissioners voted to take 

the bids under advisement pending a recommendation by the 

Flathead County road department. On September 14, 1979, the commissioners met with members of the road department and Jim Fox to 

discuss the bids. At that meeting the members of the road 

department recommended that the commissioners purchase 

plaintiff Is crusher. A motion was made, seconded and recorded: 

"Motion by Guay to accept the road department's recommendation to 

purchase gravel crusher from Modern Machinery for $305,725.00 ." 

(Emphasis added. ) 

Commissioner Joan Deist testified that the commissioners normally make one of three motions upon bids received in response to 

a call for bids; motion to accept; motion to deny; or motion to 

take under advisement. Initially, the commissioners took the 

crusher bids under advisement pending recommendation of the road 

department. On September 14, the road department recommended 

that the commissioners purchase plaintif fts crusher. 

Commissioner Guay moved to accept the road department's recommendation, the motion was seconded and duly recorded in the minutes 

of the meeting. The third commissioner later noted a no vote on 

the minutes as he wasn't in attendance at the September 14 

meeting. 

Flathead County argues there was not acceptance as there was 

no notice of bid award issued by the clerk and recorder's office. 

However, everyone in attendance at the meeting, including the 

commissioners, testified that they thought the commissioners were 

going to buy plaintiff Is crusher. We find there was acceptance 
on the part of Flathead County when the commissioners accepted 

and made minutes reflecting the acceptance, and plaintiff was 

only fulfilling its obligation on the contract by ordering and 

delivering the crusher. There is no statutory provision for the 

procedure argued by the county. 

Flathead County further argues there was no writing which 

satisfies the statute of frauds, sect ion 30-2-201 , MCA. As 

stated above, this Court has previously held a written bid can 

ripen into a contract if accepted by the offeree. Carriger v. 

Ballenger, supra. Here, we have found the written bid was 

accepted by Commissioner Guay Is motion which was seconded by Commissioner Deist and recorded in the minutes of the September 14 

meeting. Thus, there was a valid contract, not barred by the 

statute of frauds. 

The next issue is whether the jury was properly instructed on 

the measure of damages. First, plaintiff argues the giving of 

court's instruction No. 7 was in error. The instruction states: 

"If you find that the Plaintiff is entitled to 

damages, you may award any of the following: 

1) Lost net profits; 2) Incidental damages 

such as expenses incurred in the transportation of goods a£ ter the buyer's breach ." 

The measure of damages when a buyer wrongfully rejects or 

revokes acceptance of goods is governed by the Uniform Commercial 

Code. Section 30-2-703, MCA, states: "Where the buyer wrongfully rejects or revokes acceptance of goods . . . the aggrieved 

seller may: (d) resell and recover damages as hereinafter provided ( 30-2-706 ) ; (e ) recover damages for nonacceptance 

(30-2-708) . . ." Pursuant to section 30-2-706, MCA: " the 

seller may recover the difference between the resale price and 

the contract price together with any incidental damages . . . less expenses saved in consequence of the buyer's breach." 

Pursuant to section 30-2-708, MCA: "the measure of damages for 

nonacceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the 

unpaid contract price together with any incidental damages . . . 
less expenses saved in consequence of the buyer's breach ." or "If 

the measure of damages provided in subsection (2) is inadequate 

to put the seller in as good a position as performance would have 

done then the measure of damages is the profit . . . which the 

seller would have made from full performance by the buyer 

together with any incidental damages . . ., due allowance for 

costs reasonably incurred and due credit for payments or proceeds 

of resale ." 

We find court's unstruction no. 7 was not a correct statement 

of the law as stated by the U.C.C. The possible measures of 

damages under the U.C.C. are not stated in permissive language, 

but rather, are mandatory and specifically state the amount of 

recoverable damage depending upon the remedy seller has pursued . The District Court's use of the words "may award any of the 

following" in instruction no. 7 implied to the jury that they 

were not required by law to award specific damages. Thus, the 

giving of the District Court's instruction no. 7 was in error as 

being in contradiction of the U.C.C. 

Plaintiff also claims the giving of the following instruction 

was in error: 

"A party who alleges that it has been damaged 

by the breach of contract by another party is 

bound to exercise reasonable care and diligence to avoid loss and to minimize its 

damage. A party may not recover for losses 

which could have been prevented by reasonable 

efforts on its part ." 

We find the giving of this instruction was in error. In this 

case a method of mitigating damages is addressed by section 

30-2-704 (2), MCA. The section states : 

"Where the goods are unfinished an aggrieved 

seller may in the exercise of reasonable commercial judgment for the purposes of avoiding 

loss and of effective realization either 

complete the manufacture and wholly identify 

the goods to the contract or cease manufacture 

and resell for scrap or salvage value or 

proceed in any reasonable manner." 

This section is better understood by looking to the Official 

Comment to section 30-2-704 (2), MCA: 

"Under this Chapter the seller is given 
express power to complete manufacture or procurement of goods for the contract unless the 

exercise of reasonable commercial judgment as 

to the facts as they appear at the time he 

learns of the breach makes it clear that such 

action will result in a material increase in 

damages. The burden is upon the buyer to show 

the commerically unreasonable nature of the 

seller's action in completing manufacture." 

Here, Commissioner Guay expressed concern about the contract 

at an early date, but, the board of commissioners refused to 

repudiate the contract. The county has power to contract, and 

its contracts are the contracts of its board of county commissioners, not of the individual members thereof. Bennett v. 

Petroleum County et al. (1930), 87 Mont. 436, 447, 288 P. 1018, 

1020. Commissioner Guay did not have the authority to individually revoke the contract and when plaintiff asked that the 

board take some action it refused. Thus, plaintiff was acting in 

a commercially reasonable manner to fulfill its obligation under 

the contract. If plaintiff had not delivered the crusher within 

forty-five days, it would have breached the contract and exposed 

itself to legal liability. Had the board taken some action at an 

early date, plaintiff could have mitigated its damages under section 30-2-704, MCA. The District Court's instruction unfairly 

placed the entire burden to mitigate damages upon plaintiff 

whereas the comments to section 30-2-704, MCA, state: "the burden is upon the buyer [Flathead County] to show the commerically 

unreasonable nature of the seller 's act ion in completing 

manufacture." Thus, the giving of the Courtts instruction was in 

error. 

The last issue is whether the jury verdict was supported by 

substantial credible evidence. As stated above , the measure of 

damages is governed by section 30-2-706, MCA, and section 

30-2-708, MCA. Under section 30-2-706, MCA, the damages would be 

the contract price ($305,725) plus incidental damages less the 

resale price ($186,499.86 ) and expenses saved in consequence of 

the buyer's breach. Under section 30-2-708 (2) the damages would 

be plaintiff's anticipated profit ($78,879.56) plus incidental 
damages less credit for payments made or proceeds of resale. 

Using either section in this instance the record shows 

plaintiff's damages were far in excess of $10,000 and there is 

no substantial credible evidence which can support the jury verdict. 

We affirm the case as to county's liability and judgment 

is reversed and the case is remanded to the District Court for a 

hearing on damages by following the applicable statutes.