Opinion ID: 1204270
Heading Depth: 3
Heading Rank: 3

Heading: Other Alleged Additional Subcontract Obligations

Text: The remaining entries in the litany of additional obligations allegedly imposed by M-N's form subcontract similarly fail to establish that M-N unreasonably added to NGC's duties. These terms covered issues which can be implied from industry custom or left open for further negotiations. Their mere inclusion in the subcontract does not demonstrate that M-N imposed duties on NGC materially different from those NGC should have known would apply. M-N sent NGC its standard subcontract. The record contains no evidence that NGC objected to any of the terms of payment, indemnity, change order procedures, etc. Indeed, NGC twice readily signed the subcontract, striking out only the bonding requirement of the first draft and altering product specifications and warranties in the second draft. These other terms can hardly be deemed material additions to the contract when NGC apparently did not consider them consequential at the time. NGC has defended this action by accusing M-N of bid shopping, implying that M-N forced an unwilling NGC to accept additional terms or lose the contract. We could not condone such a practice. Here, however, the record demonstrates that during the summer-long contract negotiations, NGC seriously disputed only the bonding requirement. M-N allowed NGC to substitute personal guarantees for the bond. As the deadline for starting work approached, NGC unilaterally limited warranties on products in contravention of the bidding documents. One day after executing the subcontract, NGC unilaterally revoked it. A subcontractor cannot string along the general until the time for performance nears and then suddenly limit its promised performance. [3] Such conduct forces the general to accept a substitute performance or face delays in finding a substitute subcontractor. NGC relies on two cases in which courts have refused to apply the doctrine of promissory estoppel in the area of construction bidding. C.H. Leavell & Co., 414 P.2d 873; R.J. Daum Construction, 247 P.2d 817. They are distinguishable from the instant situation because the general contractors in each attempted to expand the scope of the duties required of the subcontractor. Here, no such expansion occurred. The record does not support NGC's claim that M-N materially altered the conditions reasonably assumable by NGC when bidding. When M-N notified NGC in writing to proceed, it unequivocally accepted NGC's bid. At that point, the parties had a contract with terms covering the details of their agreement left open. The mere addition of terms to the proposed final contract does not establish a material alteration of NGC's promises. On this record, the additional terms are not material. In Alaska Bussell Electric v. Vern Hickel Construction, 688 P.2d 576 (Alaska 1984), we estopped a subcontractor from revoking its bid prior to the general contractor's acceptance. We accepted the view that the general's incorporation of the subcontractor's bid into the general bid constituted justifiable reliance sufficient to enforce the subcontractor's promise. Id. at 588. This case presents stronger reasons for enforcement of the subcontractor's promise than did Alaska Bussell. M-N demonstrated its reliance not only by incorporating NGC's bid but also by relying on the bid during summer-long negotiations with NGC for a final contract. Moreover, as noted above, M-N expressly accepted NGC's bid before NGC withdrew it. The trial court's equitable enforcement of NGC's bid was not clearly erroneous. The interests of justice necessitated enforcement. See Zeman, 699 P.2d at 1284. M-N relied not only on the original bid, but on four months of repeated assurances of performance and lack of objections by NGC. By its own words and conduct, NGC obligated itself to perform. NGC is, therefore, estopped to deny M-N's entitlement to compensation for damages incurred due to its reasonable reliance on NGC's promise.