Court Opinion

ID: 9595366
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:39:35.13323+00
Date Added: 2024-06-11T14:58:31.089206
License: Public Domain

BACA, Justice (dissenting). I respectfully dissent from the majority’s opinion. I am not convinced that the City’s initial notice of award constituted acceptance of Conwell’s bid and believe that the requirement that Conwell provide documentation of bonds and insurance constituted a condition precedent to formation of the contract. The majority and I part ways on the characterization of the requirement that valid insurance coverage with accompanying documentation be procured as a condition precedent to performance, not formation. As the majority properly indicated, whether a condition is precedent to formation or performance is controlled by the parties’ intent. See Western Commerce Bank v. Gillespie, 108 N.M. 535, 775 P.2d 737 (1989). The majority does not, however, point to any evidence indicating that the parties intended the requirements as condition precedent to performance, and I believe that the language of the agreement, the actions of the parties, and the nature of the conditions (specifically the importance of performance bonds and insurance coverage in a project of this type and their reflection on the contractor’s capacity to fulfill the requirement of responsibility and to be a party to this contract) all indicate that they were precedent to formation. In its letter giving notice of award, the City reminded Conwell of the remaining requirements specified in the bid proposal, including the performance bonds and certificates of insurance. The letter went on to specify that the bonds and certificates would have to be “accepted” by the City before the contract documents would be executed. I believe a plain reading of this indicates that the City reserved the right to accept the documentation, that this went to the contractor’s ability to properly fulfill its part of the contract, and that until the City accepted the documentation, there was no contract. A reading of the documents as a whole compels this interpretation. The bid solicitation indicates that the contract would be awarded to the “lowest responsible bidder.” The bond and certificate of insurance constituted partial proof of the contractor’s responsibility and capacity to properly fulfill its contractual obligations. The solicitation also indicates that after bids were opened the City would make “a tentative determination of the qualifications of the apparent low bidder to perform the work,” further evincing the intent that acceptance was conditional upon further proof of responsibility. The actions of the parties at the time further evince their intent that furnishing of proper documentation was a condition precedent to formation of the contract. The City believed that, to allow Conwell further time to cure the defects in the documentation, the irrevocability period had to be extended. Conwell began to renegotiate on this basis, claiming that it would extend the period if the City waived certain of the solicitation’s provisions. This indicates that both parties reasonably believed no contract had yet been formed— there would be no reason to extend the irrevocability period if the bid had already been accepted. Finally, a common-sense analysis of the transaction demonstrates the folly of labeling it a condition precedent to performance rather than formation. The purpose of the requirement of documentation was not to enable Conwell to perform, but to determine its capacity to perform. Cf. Gillespie, 108 N.M. at 537, 775 P.2d at 739 (obtaining of financing conditioned performance). In Silva v. Noble, 85 N.M. 677, 678, 515 P.2d 1281, 1282 (1973), we stated that “to constitute a binding contract, there must be an unconditional acceptance of the offer made.” This “requires manifestation of unconditional agreement to all of the terms of the offer and an intention to be bound thereby * * *. [Rjegardless of the form or means used, there must be made manifest a definite intention to accept the offer and every part thereof and be presently bound thereby without material reservations or conditions.” Id. at 679, 515 P.2d at 1283 (citations omitted). The City has not manifest such a definite intent, and I cannot acquiesce to the majority’s characterization of the conditions as mere conditions to performance. Although I agree that the City’s error may have been partially responsible for Conwell’s failure to meet the condition, I note that the City attempted to give Con-well the opportunity to cure the deficiencies. The December 22 preconstruction conference that the majority explains as indicating the City’s acquiescence to Con-well’s de minimis failure to conform to the condition appears more likely to represent the City’s desire to allow Conwell to cure the defect. It was not the failure to meet the condition to provide timely proof of responsibility that ultimately caused this contract not to be consummated. In order for the City to allow Conwell to cure and meet the condition, the City required an extension of the bid irrevocability period. Conwell refused to extend the period, effectively precluding its offer from further consideration. Accordingly, I would affirm the district court’s summary judgment in favor of the City.