Opinion ID: 1208304
Heading Depth: 1
Heading Rank: 3

Heading: The City Council's Vote to Conditionally Award the Contract

Text: Wadsworth's second contention is that the City awarded it the contract when the City Council voted to conditionally accept its bid at the meeting on January 10, 1991. Wadsworth asserts that its representatives reasonably believed that the City had awarded it the contract when the Council voted, the city architect informed Wadsworth of the award, and the city attorney requested subcontractor information normally only requested after an award. An acceptance is a manifestation of assent to an offer, such that an objective, reasonable person is justified in understanding that a fully enforceable contract has been made. See Engineering Assocs., Inc. v. Irving Place Assocs., Inc., 622 P.2d 784, 787 (Utah 1980). At its January 10 meeting, the City Council clearly and unambiguously imposed a condition of price reduction on its acceptance of Wadsworth's bid. A Wadsworth representative attended the meeting and could not have reasonably concluded that the Council's actions amounted to an unqualified acceptance. In addition, the city architect made the City's condition clear to Mr. Wadsworth during a telephone discussion immediately before the council meeting. In light of these circumstances, Mr. Wadsworth could not reasonably assume that the city attorney's subsequent request for information about Wadsworth's subcontractors indicated an unqualified acceptance of its bid. Indeed, a request for information is a reasonable step in the negotiation process, even where, as here, the information requested is not normally disclosed before a contract is formed. Wadsworth further argues that the condition imposed by the City should be disregarded because it was illusory and was not a material qualification of Wadsworth's offer, which incorporated a changes provision that would facilitate a reduction in price. It points out that it submitted its bid in compliance with the contract documents prepared by the City, which provided, The [City] may by Construction Change Directive, without invalidating the Contract, order changes in the Work within the general scope of the Contract consisting of additions, deletions or other revisions, the Contract Sum and Contract Time being adjusted accordingly. Wadsworth asserts that because this provision could facilitate a price reduction through cancellation of the skylight and the canopy, the City's condition was merely a restatement of terms already in the contract and did not qualify the City's acceptance. An acceptance must unconditionally assent to all material terms presented in the offer, including price and method of performance, or it is a rejection of the offer. Williams v. Espey, 11 Utah 2d 317, 322, 358 P.2d 903, 906 (1961); R.J. Daum Constr. Co. v. Child, 122 Utah 194, 200, 247 P.2d 817, 819 (1952); see 17 C.J.S. Contracts § 43 (1963) (stating that price and method of performance are two material terms of an offer). Also, the burden of proof for showing the parties' mutual assent as to all material terms and conditions is on the party claiming that there is a contract. B & R Supply Co. v. Bringhurst, 28 Utah 2d 442, 444, 503 P.2d 1216, 1217 (1972). Wadsworth has not met its burden. Even though the City could have reduced Wadsworth's price by using the changes provision in the proposed contract, Darrell J. Didericksen & Sons, Inc. v. Magna Water & Sewer Improvement Dist., 613 P.2d 1116, 1118 (Utah 1980), the City chose to impose a condition on its acceptance of Wadsworth's bid. This condition was not rendered meaningless simply because another choice was available. As the City points out, use of the changes provision would not have assured the City of the same protection as precontract negotiations because any dispute between the two parties after the contract was entered into would have to be settled in arbitration. By imposing the condition, the City maintained its negotiating power to secure for the public the most work for the best price. At any rate, the price and quantity of construction in Wadsworth's bid were two material terms which the City must have accepted to create a binding contract, and it specifically rejected them at the January 10 Council meeting. The rest of Wadsworth's contentions are without merit. It argues that the City's conditional acceptance amounted to a full acceptance because the price reduction and cancellation of the skylight and the canopy did not change the general scope of the work contracted. Whether these actions were within the general scope of the proposed contract is not relevant. That is relevant only when courts are faced with the issue of whether a change made pursuant to an established contract is so cardinal that it amounts to a breach of the contract. Servidone Constr. Corp. v. United States, 19 Cl.Ct. 346, 376 n. 9 (1990), aff'd, 931 F.2d 860 (Fed.Cir.1991); Air-A-Plane Corp. v. United States, 408 F.2d 1030, 1032-33 (Ct.Cl.1969). It is not relevant in determining whether a contract was ever formed. Wadsworth also argues that St. George City ordinance 9-5-4(3) prohibits the City from negotiating privately with bidders prior to awarding the contract and therefore the Council must have intended to award the contract when it authorized negotiations. The ordinance provides in relevant part: Where a bid exceeds available funds and time or economic considerations preclude resolicitation of work or purchase of a reduced scope or quantity, the Purchasing Agent may negotiate an adjustment of the bid price, including changes in the bid requirements, with the low responsible bidder, in order to bring the low bid within the amount of available funds. This ordinance does not prohibit negotiations. In fact, it specifically authorizes the City to negotiate price and bid requirements with a bidder when the bid exceeds the available funding for a project and when time or economic considerations preclude resolicitation of work. Wadsworth argues that the preaward negotiations were not valid because the trial court made no findings that time or economic constraints precluded the City from rebidding the project. We find that the record amply supports the legitimacy of the negotiations. The minutes of the January 10 meeting clearly indicate that to qualify for federal funding for the project, the City needed to award the bid by January 11. The city public works director further testified at trial that the City had projected that sixty-seven percent of the cost of the project would be paid for by federal funds and that these funds were vital to the completion of the project. He also testified that the federal government extended the deadline only after negotiations with Wadsworth failed. Wadsworth did not contradict this testimony. In fact, Wadsworth admitted in its briefs that the City was under pressure to award the bid quickly. Thus, we find that the City properly attempted to negotiate with Wadsworth under section 9-5-4(3) of the City Code. Finally, Wadsworth asserts that the parties' failure to sign a written agreement pursuant to the January 10 Council meeting does not preclude this court from finding a contract since case law holds that no formal writing is needed to create a binding contract. Because we find that the City did not unconditionally accept Wadsworth's bid at the January 10 meeting, we do not need to reach that issue.