Legal Column: Who pays When the Bid Is Wrong?

When you bid on a construction project, you are subject to contract formation law — the law of offer and acceptance — which holds contractual duties absolute. Short of absolute impossibility, no hardship, foreseen or unforeseen, will free either party from the bargained- for exchange of promises. Until recently, this meant contractors could not claim relief from bid mistakes or price changes. This effectively prevented a bidder from finding a mistake simply to get out of a poor bargain. However, a cursory view of case law in this area reveals that today’s courts are more willing to consider relief for certain types of mistakes. Current contract law defines a mistake as “a belief not in accord with the facts.” Common mistakes include