Opinion ID: 2150921
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Heading Rank: 2

Heading: Equitable estoppel and promissory estoppel.

Text: This court has held that a municipality may become bound by principles of equitable estoppel under some circumstances. Eau Claire Dells Improvement Co. v. Eau Claire (1920), 172 Wis. 240, 179 N. W. 2; Shulse v. Mayville, supra ; Marathon County v. Industrial Comm. (1937), 225 Wis. 514, 523, 272 N. W. 374, 275 N. W. 437; Lang v. Cumberland (1962), 18 Wis. 2d 157, 118 N. W. 2d 114; Harte v. Eagle River (1970), 45 Wis. 2d 513, 173 N. W. 2d 683. However, it is generally held that a municipality is not estopped to deny the invalidity of a contract let without complying with competitive bidding requirements. 1 Antieau, Municipal Corporation Law, p. 753, sec. 10.27. The measure of recovery under the doctrines of equitable estoppel and promissory estoppel differs from that of unjust enrichment. Where a contractor is permitted to recover on the theory of unjust enrichment, he is permitted to recover only the value of the benefits conferred and denied profits. Under the doctrines of equitable estoppel and promissory estoppel, the municipality would be estopped to deny the validity of the contractthus, application of these doctrines would permit recovery at the contract price. Recovery is denied on these theories for the same reason recovery is denied on the contract. To permit recovery would impair the protection intended to be afforded by the statutes requiring competitive bidding. It would not insure that services are received by the municipality at the lowest price practical and would not prevent repeated violation of statutes requiring competitive bidding. The creation of an exception where, as in this case, extra work is done under a supplement to a contract which was not let in compliance with competitive bidding requirements, but at the same unit price as a valid contract awarded to the lowest responsible bidder, may not have the effect of impairing the protection intended to be afforded by statutes requiring competitive bidding. However, with regard to recovery on the contract for extra work, this court has held that changes are valid only where they do not substantially change the character of the work or unreasonably increase its cost, and are made pursuant to a provision in the contract permitting such changes. Thomsen-Abbott Construction Co. v. Wausau (1960), 9 Wis. 2d 225, 100 N. W. 2d 921. Moreover, sec. 62.15 (1c), Stats., permits an increase in the quantity of work to be done under contract but only to the extent of 15 percent of the cost of the original contract price, and then, only when the contract contains a clause providing for such increase. The demurrer to the alternative causes of action on equitable estoppel and promissory estoppel was properly sustained. By the Court. Order affirmed in part; reversed in part.