C.G. Schmidt, Inc. v. Permasteelisa North America
Dist. Ct. did not err in granting defendant-subcontractor’s motion for summary judgment in action by plaintiff-general contractor alleging that defendant had failed to perform on subcontract, where Dist. Ct. could properly find that parties did not intend to be bound until execution of formal subcontract that was never signed by defendant. Record showed that: (1) plaintiff had accepted defendant’s bid on subcontract, but did not enter into formal contract at that time; (2) parties engaged in further negotiations over one year in duration that attempted to refine contract price and other terms of subcontract; (3) plaintiff eventually signed prime contract with project owner, whose project was subject of instant subcontract; (4) after plaintiff signed prime contract, it sent to defendant three proposed formal subcontracts that had three different contract prices; and (5) defendant subsequently “disengaged” from project after informing plaintiff that problems with its overseas supplier prevented it from performing on said project. Moreover, two letters of intent drafted after plaintiff had accepted defendant’s bid indicated that parties had not yet solidified their relationship into binding agreement. Ct. also rejected plaintiff’s claim that defendant was liable under promissory estoppel theory based on plaintiff’s use of defendant’s bid price when entering into agreement with project owner, since record showed that plaintiff continued to negotiate with defendant over subcontract price after plaintiff had entered into agreement with project owner.