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Matched Legal Cases: ['§ 1585', '§ 89', '§ 52', '§ 2206', '§ 2332', '§ 146', '§ 609', '§ 29', '§ 29', '§ 599', '§ 1', '§ 1651', '§ 42', '§ 2305', '§ 2305', '§ 599']

Coleman Engineering Co. v. North American Aviation, Inc. :: :: Supreme Court of California Decisions :: California Case Law :: California Law :: US Law :: Justia
Justia › US Law › Case Law › California Case Law › Cal. 2d › Volume 65 › Coleman Engineering Co. v. North American Aviation, Inc.
In January 1959, defendant invited bids for the engineering and manufacturing of 32 positioning or lift trailers and 7 transportation trailers to accommodate its Hound Dog Missile. With the invitation to bid, defendant submitted its basic equipment specifications. Section 3.2.2.9 of the specifications contained a description of the "configuration of the payload," namely, "a 36.5 inch dia. cylindrical payload configuration, [65 Cal. 2d 399] the longitudinal centerline of which shall coincide with the trailer centerline in the plane of the rail top surfaces." References to configuration of the payload are also found in other specifications, namely, a provision dealing with load rails refers to "payloads of various configurations," the intended use provision refers to "missiles or special payloads for aircraft and missiles" and a provision designated loaded stability states that part of the payload is "at a point 46 inches above the rail top surfaces."
On June 23, 1959, defendant sent plaintiff five "go ahead" telegrams, informing it that it was the successful bidder. fn. 1plaintiff then started the design and engineering of the [65 Cal. 2d 400] trailers. On July 6 defendant delivered to plaintiff a series of purchase orders, which, according to the pleadings of both parties, constitute the contract between them. The purchase orders state a total price of $527,632 and provide for delivery of trailers to commence on September 15 and contain the same equipment specifications with regard to configuration of the payload as found in the equipment specifications in the invitation to bid. The purchase orders provided for "a binding contract on the terms set forth herein when it is accepted either by acknowledgment or delivery."
The president of plaintiff did not sign and return the copies of the purchase orders to defendant until July 15, 1959. Meanwhile, at a meeting of engineers of plaintiff and defendant on July 7, the engineers of defendant stated that it desired the trailers to be designed to accommodate a payload center of gravity 35 inches above the rail top surfaces. When the engineers of plaintiff stated that it had bid on the contract on the basis that the specification placed the center of gravity at rail height and had so indicated in its stress report attached to its bid, defendant's engineers admitted that they had not read that report.plaintiff's engineers also stated at that time that their work had been based on the assumption of a vertical center of gravity at rail height, that the changing of the center of gravity would entail an increase in costs and a delay in schedule, and that plaintiff desired a change in specifications defining the location of the center of gravity if defendant wanted it at a place other than the top of the load rails. The engineer in charge for defendant requested that work continue [65 Cal. 2d 401] on the trailers and stated that changes in the specifications would be forthcoming.
Defendant replied that under the purchase orders plaintiff was entitled only to the costs of the changes and that if plaintiff terminated work, the termination would not constitute a termination for convenience but a breach. As a result of subsequent conferences, plaintiff did not stop work on November 5, [65 Cal. 2d 402] but instead submitted a new cost breakdown of the contract as changed. In a letter accompanying this breakdown dated November 10, 1959, plaintiff took the position that it would not agree to arriving at a price on the theory of a comparison between the cost breakdown of every item before the change as compared to a cost breakdown of every item after the change.
Defendant contracted with another firm for construction of the trailers at a cost of over $800,000, some $28,000 more than the amount of plaintiff's last offer. On March 29, 1960, plaintiff [65 Cal. 2d 403] submitted to defendant its termination claim of $296,783.03 for expenses incurred in performing the contract.
It is unnecessary to discuss in detail these contentions because, first, other facts found by the trial court and supported by the evidence require a conclusion that the [65 Cal. 2d 404] contract as originally entered into did not provide for a vertical center of gravity at a point 35 inches above rail height, and, second, it is immaterial whether the contract came into existence on July 6 or July 15.
[1] A contractor who, acting reasonably, is misled by incorrect plans and specifications issued by another contracting party as the basis for bids and who, as a result, submits a bid which is lower than he would otherwise have made may recover in a contract action for extra work necessitated by the incorrect plans and specifications. (Cf. Souza & McCue Constr. Co. v. Superior Court, 57 Cal. 2d 508, 510 [20 Cal. Rptr. 634, 370 P.2d 338]; MacIsaac & Menke Co. v. Cardox Corp., 193 Cal. App. 2d 661, 669 [14 Cal. Rptr. 523].)
The court found, and the finding is supported by the evidence, that after the July 7 meeting "defendant requested plaintiff to continue working on the project, the subject matter of the contract, and stated that changed specifications would be forthcoming from defendant to plaintiff." It is clear that after the so-called mistake was discovered defendant did not seek to withdraw its purchase orders but to the contrary took the position that performance should continue and that changes would be made in the specifications. The purchase [65 Cal. 2d 405] orders, as we have seen, permitted defendant to require changes with a mutually satisfactory adjustment in price and time for performance, and under the circumstances it must be concluded that the contract entered into by the parties did not provide for a vertical center of gravity 35 inches above the rails and that the fixing of the vertical center of gravity at a location satisfactory to defendant was to be accomplished by a change in specifications.
[2] The general rule is that if an "essential element" of a promise is reserved for the future agreement of both parties, the promise gives rise to no legal obligation until such future agreement is made. (Ablett v. Clauson, 43 Cal. 2d 280, 284-285 [272 P.2d 753]; City of Los Angeles v. Superior Court, 51 Cal. 2d 423, 433 [333 P.2d 745].) [3] "The enforceability of a contract containing a promise to agree depends upon the relative importance and the severability of the matter left to the future; it is a question of degree and may be settled by determining whether the indefinite promise is so essential to the bargain that inability to enforce that promise strictly according to its terms would make unfair the enforcement of the remainder of the agreement. [Citations.] [4] Where the matters left for future agreement are unessential, each party will be forced to accept a reasonable determination of the unsettled point or if possible the unsettled point may be left unperformed and the remainder of the contract be enforced. [Citations.]" (City of Los Angeles v. Superior Court, supra, 51 Cal. 2d 423, 433; Metropolitan Water Dist. v. Marquardt, 59 Cal. 2d 159, 194 [28 Cal. Rptr. 724, 379 P.2d 28].)
Application of these rules to provisions governing change orders in a building contract where the price for the changes is subject to mutual satisfaction is difficult because ordinarily it cannot be determined at the time of entry into the agreement or until change orders are sought whether the provisions governing change orders are or are not an "essential element" of the agreement. It is undesirable to hold the entire [65 Cal. 2d 406] contract unenforceable when there may be no need for change orders or the change orders are insubstantial in relation to the balance of the agreement. On the other hand, where the change orders are substantial in relation to the remainder of the agreement so that the provision for change orders becomes an "essential element" of the contract, it is often unfair to require a party to perform while awaiting a reasonable determination as to price. The change orders may require matters which the contractor may not be equipped to produce except at an unreasonable cost or may require such an increase in costs that progress payments may be essential for the protection of the contractor. The last alternative suggested above, leaving the unsettled point unperformed and enforcing the balance of the contract, would obviously result in unfairness to a contractor where he is compelled to incur substantial expenses as a result of change orders and denied any payment.
[5] Because the relative importance of the change provision of the agreement cannot be known until changes are sought, we are satisfied that the effect to be given to the provision for adjustment of price to the mutual satisfaction of the parties should not be determined merely from the written agreement itself but should depend upon the changes requested. [6] Accordingly, where a provision for changes contains an agreement to agree in the future as to price, the contract is not invalid from the outset, and the validity of the provision for changes depends upon subsequent events. [7] Undoubtedly, if the subsequent changes are minor or of not great magnitude the contractor must perform and obtain a subsequent judicial determination as to the price of the changes. However, where the changes are of great magnitude in relation to the entire contract, the contractor must negotiate in good faith to settle the price (cf. Comunale v. Traders & General Ins. Co., 50 Cal. 2d 654, 658 [328 P.2d 198] [there is an implied covenant of good faith and fair dealing in every contract]), and where he has done so, he is not required to continue performance in the absence of an agreement as to the price.
Cases relied upon by defendant, such as Snow Mountain W. & P. Co. v. Kraner, 191 Cal. 312, 316-318 [216 P. 589], are not controlling because change order clauses therein either did not contain a provision that the price of the change would be fixed to the mutual satisfaction of the parties but instead contained a formula for determination of the price (cost plus a percentage of cost) or, if the price was to be fixed by future [65 Cal. 2d 407] agreement, there was also an express provision to continue performance in the absence of the agreement.
[8] In the instant case, the court concluded that the change, because of its nature, magnitude, and effect, ran to the entire consideration of the contract (see Medico-Dental etc. Co. v. Horton & Converse, 21 Cal. 2d 411, 419 [132 P.2d 457]), and that plaintiff acted fairly in its negotiations after the change order. Both of these determinations are supported by the record. For this reason plaintiff was not required to continue performance in the absence of an agreement as to price.
[9] Aside from any contractual provision, interest is awarded as damages by way of compensation for wrongful detention of money due plaintiff. Of course, the allowance of such interest only occurs when the sum is liquidated within the meaning of section 3287. (Ansco Constr. Co. v. Ocean View Estates, Inc., 169 Cal. App. 2d 235, 238 [337 P.2d 146].)
It has been held that in a cost-plus building contract the amount due is capable of ascertainment by calculation so that an award of interest for a period prior to judgment is proper. (Anselmo v. Sebastiani, 219 Cal. 292, 301-303 [26 P.2d 1]; [65 Cal. 2d 408] Maurice L. Bein, Inc. v. Housing Authority, 157 Cal. App. 2d 670, 686-688 [321 P.2d 753].) As we have seen, section 8-706 provides as applicable here that the subcontractor shall recover his costs and a certain percentage for profit where the contractor terminates under the power it reserved in the contract. The contract thus provides in effect that payment shall be made on a cost-plus basis, and except for the possibility that certain expenses are not subject to calculation, there does not appear to be any reason to refuse to apply here the rule governing cost-plus contracts generally.
MacIsaac & Menke Co. v. Cardox Corp., supra, 193 Cal. App. 2d 661, 673-674, relied upon by defendant, does not establish a contrary rule. The basis of damages in that case was the "value" of extra work done under the peculiar circumstances present, and the court pointed out that such circumstances "precluded ascertainment of the cost of the work by computation."
Defendant next urges that interest should not have been awarded because plaintiff's original demand of damages exceeded the amount awarded. The approximate net amount of the excess was around $7,000. The reasons for this excess were that after the original demand there was a minor adjustment in the engineering burden percentage, a few matters were omitted from the original demand in error, plaintiff was able to settle some claims of its subcontractors for less than the full amount of the claims, and plaintiff was able to salvage some materials. [10] The mere fact that there is a slight difference between the amount of damages claimed and the amount awarded does not preclude an award of prejudgment interest (Koyer v. Detroit Fire & Marine Ins. Co., 9 Cal. 2d 336, 345 [65 Cal. 2d 409] [70 P.2d 927]), and the erroneous omission of a few matters from the account or erroneous calculation of the costs do not mean that the damages are not capable of being made certain by calculation.
[11] With regard to the reduction in damages due to settlement of claims and salvage of materials, it has been held in an analogous situation that offsets of the defendant, even where unliquidated, do not preclude the allowance of interest on the balance of the plaintiff's claim (Hansen v. Covell, 218 Cal. 622, 629-631 [24 P.2d 772, 89 A.L.R. 670]; McCowen v. Pew, 18 Cal. App. 482, 483 et seq. [123 P. 354]; see Lineman v. Schmid, 32 Cal. 2d 204, 212 [195 P. 408, 4 A.L.R.2d 1380]), and we are satisfied that reductions in damages due to plaintiff's efforts to mitigate damages should not preclude an award of prejudgment interest. If the rule were otherwise, a plaintiff might be encouraged to forego opportunities to mitigate damages so as not to jeopardize his right to prejudgment interest.
Defendant claims that the trial court erred by failing to make findings on 66 matters although requested by defendant to do so. The counterfindings filed by defendant and its objection to the proposed findings total almost 70 pages. In many respects the counterfindings and objections are directly or impliedly contrary to the findings made by the court, relate merely to evidentiary matters, or deal with immaterial matters. At the end of the counterfindings and objections, [65 Cal. 2d 410] defendant "requests specific findings of fact and conclusions of law on all of the issues, both of fact and of law, which are raised by and which are the subject of and which are included in the Counter-Findings and Counter-Conclusions set forth herein." No other specification was made as to the issues upon which defendant sought additional findings.
In my opinion, the parties attempted to enter into a formal [65 Cal. 2d 411] contract and erroneously believed that they had done so. Certain essential elements were left to future agreement, however, and an agreement was never reached.
The only enforceable contract between the parties was the one manifested by the five "go ahead" telegrams received and acted upon by Coleman on June 24, 1959. The telegrams contained new proposals and were therefore counteroffers to Coleman's bid. (Civ. Code, § 1585; American Aeronautics Corp. v. Grand Central Aircraft Co., 155 Cal. App. 2d 69, 80 [317 P.2d 694]; Lawrence Block Co. v. Palston, 123 Cal. App. 2d 300, 310 [266 P.2d 856]; 1 Corbin, Contracts (1963 ed.) § 89, pp. 378- 382.) When new terms are proposed, no contract arises unless the original offeror accepts the counteroffer. (Lawrence Block Co. v. Palston, supra; Apablasa v. Merritt & Co., 176 Cal. App. 2d 719, 726 [1 Cal. Rptr. 500].) If, as here, the offer specifies no particular mode of acceptance and has as its object the beginning of performance, the offeree's beginning of performance constitutes an acceptance. (Rest.2d Contracts (Tent. Draft No. 1) § 52, coms. b, c, pp. 216-218. See Logoluso v. Logoluso, 233 Cal. App. 2d 523, 529 [43 Cal. Rptr. 678]; Standard Iron Works v. Globe Jewelry & Loan, Inc., 164 Cal. App. 2d 108, 117 [330 P.2d 271]. Cf. Beatty v. Oakland Sheet Metal Supply Co., 111 Cal. App. 2d 53, 62-63 [244 P.2d 25].)
The facts found by the trial court establish that no other contract ever came into being between Coleman and North American. On July 6, 1959, Coleman received from North American the purchase orders referred to in the telegrams. The purchase orders stated that they became a binding [65 Cal. 2d 412] contract on the terms set forth therein when "accepted either by acknowledgment or delivery. ..." The trial court erred in construing this language to mean delivery of the purchase orders to Coleman and in finding that a contract therefore existed as of July 6.
It is a question of law whether the facts found gave rise to a contract. (Hunter v. Sparling, 87 Cal. App. 2d 711, 721 [197 P.2d 807].) The purchase orders, like the telegrams, contained new and important terms and were therefore a new offer. fn. 1 In such a setting, the term "delivery" cannot reasonably be construed as delivery of the purchase orders to Coleman, for such a construction would have given North American the power to close an agreement to which Coleman never assented merely by delivering the terms to Coleman. (See Lawrence Block Co. v. Palston, supra, 123 Cal.App.2d at p. 310.) "Delivery" must therefore mean delivery of the specified items. Delivery of goods is a mode of acceptance commonly recognized in commercial dealings (see, e.g., Com. Code, § 2206), although in this case such a means of acceptance was probably not contemplated because of the length of time required for performance. The contract also provided for acceptance by "acknowledgment" of receipt of the purchase orders, and acknowledgment copies were provided. fn. 2
On July 15, the president of Coleman acknowledged the purchase orders by signing and sending them to North American. Ordinarily this action would be an acceptance by Coleman of all the terms of the contract. According to the findings of the trial court, however, "on July 7, 1959, at a conference between engineers of defendant [North American] [65 Cal. 2d 413] and engineers of plaintiff [Coleman], defendant's engineers for the first time informed plaintiff's engineers that defendant desired the trailers to be designed with the payload center of gravity 35 inches above the rail top surfaces." The court further found that "After the conference on July 7, 1959, defendant requested plaintiff to continue working on the project, the subject matter of the contract, and stated that changed specifications would be forthcoming from defendant to plaintiff" and that "At defendant's request, pursuant to the contract between plaintiff and defendant, plaintiff had been performing work and rendering services for defendant for defendant's use and benefit. ..."
"Q. You knew on July 7th, didn't you, that the Coleman design placing the CG of the pay load at rail height and applying the load factors at that point, would not meet the side loads if the pay load CG were placed 35 inches above the rails? ... The Witness: Yes." [65 Cal. 2d 414]
Nothing in the record suggests that the parties agreed to go ahead on the basis of the original rail-height specification until [65 Cal. 2d 415] some formal change was made. In the interoffice memorandum of July 8, Coleman instructed its contract administrator to call North American's buyer "and ask him to send us a letter or a change to the specifications defining where they want the center of gravity, if not at the top of the load rails." (Italics added.) Such an inquiry would have been meaningless had Coleman actually intended to proceed with building a trailer with the payload center of gravity at rail height.
"Q. You certainly wouldn't expect them after that conference [65 Cal. 2d 416] to go ahead on the other interpretation, would you, sir? A. I wouldn't expect them to, no.
In these circumstances I cannot conclude that on July 15 Coleman intended to enter into a contract to build a trailer according to its own design despite its knowledge that, in the words of Coleman's own engineer, "it was not what they [North American] wanted, that they wanted the design load applied at a high CG, some distance above the rails." This knowledge gained by the Coleman engineers at the July 7 meeting is, of course, imputed to the corporation (Sanfran Co. v. Rees Blow Pipe Mfg. Co., 168 Cal. App. 2d 191, 204-205 [335 P.2d 995]; cf. Civ. Code § 2332).
Thus, when the purchase orders were signed on July 15, Coleman knew that the specification intended by North American was not for a payload center of gravity at rail height. In signing the purchase orders with this knowledge, it could not purport to accept an offer describing a center of gravity at rail height. (17 Am.Jur.2d, Contracts, § 146, pp. 493-494; 3 Corbin, Contracts (1960 ed.) § 609; Ex parte Perusini Const. Co., 242 Ala. 632, 636 [7 So. 2d 576]. Cf. Lemoge Electric v. County of San Mateo, 46 Cal. 2d 659, 662-663 [297 P.2d 638]; Brunzell Constr. Co. v. G. J. Weisbrod, Inc., 134 Cal. App. 2d 278, 286 [285 P.2d 989].) For the same reasons, North American could not maintain that Coleman had agreed to perform according to new specifications but at the original bid price. North American was fully aware, before July 15, that Coleman had bid on the basis of a payload center of gravity at rail height and that Coleman's position was that changes would be required in cost and price terms and in the time schedule.
The actions of both parties after July 15 demonstrated that the price, time of performance, and specifications for the center of gravity were not regarded as settled from the outset. Both parties treated the contract as an agreement to agree, fn. 4 relying on the change clause of the purchase orders as a basis for adjustment in specifications, price, and time of performance through future negotiations. After July 15 there were numerous negotiations concerning these open terms. [65 Cal. 2d 417]
Agreements to agree are valid and enforceable if unessential elements only are reserved for the future agreement. "The general rule is that if an 'essential element' of a promise is reserved for the future agreement of both parties, the promise gives rise to no legal obligation until such future agreement is made." (City of Los Angeles v. Superior Court, 51 Cal. 2d 423, 433 [333 P.2d 745]. See Wong v. Di Grazia, 60 Cal. 2d 525, 539 [35 Cal. Rptr. 241, 386 P.2d 817]; Apablasa v. Merritt & Co., supra, 176 Cal. App. 2d 719, 730; Putman v. Cameron, 129 Cal. App. 2d 89, 95 [276 P.2d 102]; Avalon Products, Inc. v. Lentini, 98 Cal. App. 2d 177, 179 [219 P.2d 485]; 1 Corbin, Contracts (1963 ed.) § 29, pp. 84-85.)
Whether a term is "essential" "depends upon the relative importance and the severability of the matter left to the future; it is a question of degree. ..." (City of Los Angeles v. Superior Court, 51 Cal. 2d 423, 433 [333 P.2d 745].) The relative importance of a term may turn in part upon the intentions of the parties. (See 1 Corbin, Contracts (1963 ed.) § 29, pp. 89-90.) When, however, "a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable." (California Lettuce Growers, Inc. v. Union Sugar Co., 45 Cal. 2d 474, 481 [289 P.2d 785, 49 A.L.R.2d 496]. See also Ellis v. Klaff, 96 Cal. App. 2d 471, 478 [216 P.2d 15].) At times, subsequent conduct of the parties may establish the contours of an agreement that appeared uncertain at its inception and thus render it enforceable. (Bohman v. Berg, 54 Cal. 2d 787, 794-795 [8 Cal. Rptr. 441, 356 P.2d 185].) The history of the Coleman-North American negotiations, however, establishes just the contrary; the course of events magnified and made clearer the original uncertainty of their agreement and intentions concerning many essential details. Neither design specifications, price, nor time of performance had been agreed upon, nor were they ever finally agreed upon, and the parties' extended negotiations demonstrate that they deemed both the specifications fn. 5 and price fn. 6 to be essential. Since both [65 Cal. 2d 418] of these terms as well as the time of performance fn. 7 were left to future agreement, there can be no question that essential elements were left to be agreed upon. The open terms were the very substance of the contemplated contract.
Since no contract arose when Coleman acknowledged the purchase orders, the trial court erred in awarding damages pursuant to the termination clause in those orders. When performance is rendered by one party in the mistaken belief that an enforceable contract exists, his remedy is in quantum meruit. (See 3 Corbin, Contracts (1960 ed.) § 599, pp. 593-595, fn. 22, citing Peerless Glass Co. v. Pacific etc. Co., 121 Cal. 641, 647 [54 P. 101].) Ordinarily, the measure of recovery is the reasonable value of benefits conferred upon the other party. (Challenge Cream & Butter Assn. v. Royal Dutch Dairies, 212 Cal. App. 2d 901, 908 [28 Cal. Rptr. 448]; Townsend Pierson, Inc. v. Holly-Coleman Co., 178 Cal. App. 2d 373, 378 [2 Cal. Rptr. 812]; Major- Blakeney Corp. v. Jenkins, 121 Cal. App. 2d 325, 340 [263 P.2d 655].) If the other party received no benefit, there is ordinarily no obligation to make restitution. (Ibid)
In the present case it does not appear that North American benefited by Coleman's performance. Nevertheless, after the [65 Cal. 2d 419] misunderstanding as to the center of gravity was discovered at the July 7 conference, Coleman continued to perform at North American's express request. Had the contemplated contract envisaged the performance of services instead of the production of trailers, there would be no doubt that Coleman could recover the reasonable value of its work whether or not it benefited North American. When one person performs services at the request of another, the law raises an obligation to pay the reasonable value of the services. (Williams v. Dougan, 175 Cal. App. 2d 414, 418 [346 P.2d 241].) The Restatement of Restitution rationalizes this rule with the requirement that a benefit can be conferred as a prerequisite to restitution by stating that a benefit is conferred upon another if a person "performs services beneficial to or at the request of the other, ..." (See Rest., Restitution, § 1, com. b, p. 12. Italics added.) Although this rule has usually been applied when services or work and labor were requested in their own right, rather than as incidental to the construction of a specified item to be sold to the defendant (see Williams v. Dougan, supra, 175 Cal. App. 2d 414; Bodmer v. Turnage, 105 Cal. App. 2d 475, 477-478 [233 P.2d 157]), there is no basis for limiting the rule to the performance of services. If in fact the performance of services has conferred no benefit on the person requesting them, it is pure fiction to base restitution on a benefit conferred. "[I]t is submitted that allowing a recovery in these cases on a theory of benefit conferred is purely fictional, and that the real basis is a moral obligation to restore to his original position a party who has acted to his detriment in reliance on a representation, technically unenforceable, by another that he will give value for the detriment suffered." (Note (1928) 26 Mich.L.Rev. 942, 943.)
In Kearns v. Andree, 107 Conn. 181 [139 A. 695, 59 A.L.R. 599], the court allowed the plaintiff recovery for services performed at the request of the defendant, explicitly recognizing that no benefit was conferred upon the defendant. The defendant had agreed to buy the plaintiff's building and at the defendant's request the plaintiff made alterations in the building in preparation for its transfer to the defendant. The defendant refused to buy the building and the agreement was held to be too indefinite for enforcement. The plaintiff was nevertheless allowed to recover the reasonable value of his services, without regard to the fact that no benefit was conferred upon the defendant. The court held that recovery of the [65 Cal. 2d 420] reasonable value of services performed, without regard to actual benefit, should be allowed "where the parties have attempted to make a contract which is void because its terms are too indefinite, but where one party has, in good faith, and believing that a valid contract existed, performed part of the services which he had promised in reliance upon it." (Id at pp. 187-188.)
FN 1. These telegrams limited the liability to be incurred by defendant prior to formal acceptance of the bid.
FN 2. Section 634 of the Code of Civil Procedure provides:
FN 1. The original invitation to bid sent to Coleman by North American stated "If you are the successful bidder, you will be offered a purchase order. ..." (Italics added.)
FN 2. Although each purchase order sent to Coleman contained in small print the recital that it would become a binding contract when accepted "either by acknowledgment or delivery," it advised in much larger print, "Please Sign Acknowledgment of This Purchase Order and Return Immediately Attention:purchasing Department." Accompanying each purchase order was a separate sheet entitled "Acknowledgment of Purchase Order," providing space for the offeree-seller's signature over the repeated designation, "Acknowledgment--Return Immediately to Purchasing Department." Even more significantly, each of the five "go ahead" telegrams received by Coleman on July 24 declared that North American's contractual liability would be limited to a specified figure "pending formal execution of confirming purchase order and your acknowledgment thereof" (italics added). In ascertaining the intent of parties to a contract the written portions, e.g., the telegrams in the case at bar, control its printed portions, e.g., the mention of "delivery" in the purchase order form. (Civ. Code, § 1651.)
FN 3. A Coleman interoffice memorandum dated July 8 states that placing the payload center of gravity at 35 inches above the rails "will practically double the loads on most of the members and cause most of the stress work performed to date to be recalculated. A lot of redesign will have to be performed as a result of the increased member sizes, the fabrication costs will increase due to material sizes increases, and the schedule will suffer a delay.
FN 4. In his opening statement to the trial court, Coleman's attorney stated: "Now, have in mind, I know the cases are legend that holds [sic] that an agreement to hold in the future is no agreement at all ... I wonder if that is where we are. An agreement to agree. Assuming that's where we are, then, of course, we will be left with a quantum meruit. ..."
FN 5. Lack of agreement concerning specifications, especially where, as here, they deal with the design of a major element constituting the object of the contract, may vitiate any attempt upon the part of the parties to have an enforceable agreement. (See Colorado Corp. v. Smith, 121 Cal. App. 2d 374, 376-377 [263 P.2d 79]; 1 Williston, Contracts (3d ed.) § 42, pp. 135-136; cf. Putman v. Cameron, supra, 129 Cal. App. 2d 89, 95-96.)
FN 6. It has been held that when the price term is expressly left to be agreed upon, there is no contract until agreement is reached. (California Lettuce Growers, Inc. v. Union Sugar Co., supra, 45 Cal. 2d 474, 481-482; Avalon Products, Inc. v. Lentini, supra, 98 Cal. App. 2d 177, 179-180; Noel v. Dumont Builders, Inc., 178 Cal. App. 2d 691, 696 [3 Cal. Rptr. 220]; Beech Aircraft Corp. v. Ross (10th Cir. 1946) 155 F.2d 615, 618.) Although this rule has been abrogated in the area of contracts for the sale of goods (Com. Code, § 2305), the comments to that section point out that, at least in part, the change relies on other unique features of the Uniform Commercial Code. (See Com. Code, § 2305; Uniform Commercial Code, com. 1.)
FN 7. Although in the absence of a specified date, courts will imply a reasonable time for performance (Wong v. Di Grazia, supra, 60 Cal. 2d 525, 536), the absence of a specified time contributes to the uncertainty as to whether there was an agreement. (Compare Hancock Oil Co. v. McClellan, 135 Cal. App. 2d 667, 670 [288 P.2d 39].)
FN 8. See 3 Corbin, Contracts (1960 ed.) § 599, p. 595, fn. 22; Fuller & Perdue, The Reliance Interest in Contract Damages: 2, 46 Yale L.J. (1937) 373, 395-396; Note (1928) supra, 26 Mich.L.Rev. 942, 943-944.