THE TERRA GROUP, INC., APPELLANT,
v.
SANDEFUR MANAGEMENT, INC., A FLORIDA CORPORATION, APPELLEE
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Terra Group, the lowest qualified bidder for a construction contract, was notified by Sandefur Management that its bid was accepted. Sandefur later refused to enter into the formal written construction contract based on financial reasons. The court held that a binding contract existed upon bid acceptance, and Sandefur's subsequent refusal constituted a breach, entitling Terra to damages.
A binding contract existed between the parties upon Sandefur's acceptance of Terra's bid and instruction to proceed. Sandefur breached the contract when it refused to enter into the construction contract, and Terra is entitled to recover damages for that breach. The performance bond issue is not critical because the breach occurred upon Sandefur's refusal to enter into the contract.
[1] A contract is formed when parties reach an agreement, even if a formal written contract is to be executed later.
[2] A party's notification of acceptance of a bid creates a binding contract to enter into a formal written agreement.
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“At this point there was a contract between the parties, an agreement to enter into the formal written construction contract and for appellant to obtain a performance bond.”
Establishes that the court found a binding contract existed upon bid acceptance and instruction to proceed, before execution of the formal written contract.
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Join FLexlaw to unlock all legal intelligenceTerra Group submitted a bid to serve as general contractor for a demolition, renovation, and remodeling project. Sandefur Management accepted Terra's …
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DAUKSCH, Judge.
This is an appeal from a judgment in a contract case.
Appellant was one of the bidders for a contract to build a building for appel-lee. He was the lowest of the qualified bidders and was notified by appellee that his bid was accepted. At this point there was a contract between the parties, an agreement to enter into the formal written construction contract and for appellant to obtain a performance bond. Before the execution of the written construction contract appellee sent a letter to appellant saying in pertinent part: We are pleased to inform you that we have accepted your December 16, 1986 bid for General Contractor on the demolition, renovation and remodeling of the above referenced project.
Please proceed on providing the prescribed performance and payment bond and execute the contract agreement as soon as possible.
Although appellee says now that it is not bound to its agreement to enter into a construction contract, appellant has adequately demonstrated that appellee defaulted when it sent a letter saying in pertinent part:
In confirmation of our phone conversation today, Sandefur Management, Inc., has elected not to enter into the construction contract on the above referenced project with your firm. Their decision not to enter into the agreement with you are [sic] based solely on financial reasons.
Issues arose in the trial court regarding the provision of the performance bond. Appellee says that because appellant never provided it that appellant cannot enforce the contract. Appellant says the reason he did not get the bond is because the appellee failed to satisfy the bonding company that it was financially able to pay for the building upon completion. The bonding company required, reasonably, that appellee demonstrate it was able to pay for the building when complete. This appellee did not do, so appellant could not get the performance bond. These latter matters are not critical to the issue, however, because the breach of the contract occurred when appellee announced to appellant that it refused to enter into the construction contract.
The judgment for appellee is reversed and this cause remanded for trial as to appellant’s damages.
REVERSED and REMANDED.
COBB and COWART, JJ., concur.
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City OF Miami Beach v. Dickerman Overseas Contracting Co., 659 So. 2d 1106 (Fla. 3d DCA 1995)…n in the absence of a written, executed agreement between the parties. Schloesser, 383 So. 2d at 1130 (contract exists between County and successful bidder even in absence of written agreement). Accord Terra Group, Inc. v. Sandefur Management, Inc., 527 So. 2d 849, 849 (Fla. 5th DCA 1988) (upon notification that bid was accepted contract existed between parties to enter into the formal written contract); Dedmond v. Escambia County, 244 So. 2d 758, 760-61 (Fla. 1st DCA 1971) (cancellation of award prior to exe…
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Lockheed Martin Corp. v. Galaxis USA, Ltd., 222 F. Supp. 2d 1315 (M.D. Fla. 2002)…the creation of a valid and enforceable contract when a party clearly communicates assent, even when that assent contemplates the future execution of a contract that is ultimately never executed. Terra Group, Inc. v. Sandefur Management, Inc., 527 So.2d 849, 849-50 (Fla.App.5th D.C.A.1988) Issues of contract interpretation are generally questions of law and, thus, properly resolved on summary judgment. See Lawyers Title Ins. Corp. v. JDC (America) Corp., 52 F.3d 1575, 1580 (11th Cir.1995). Ho…