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Keywords

contractlawsuitnegligenceequitytrialmotionsummary judgmentwillrescissionmotion for summary judgmentequitable relief

contractnegligenceequitywillgood faith

Related Cases

First Baptist Church of Moultrie v. Barber Contracting Co., 189 Ga.App. 804, 377 S.E.2d 717

Facts

The First Baptist Church of Moultrie invited bids for a construction project, requiring a bid bond. Barber Contracting Company submitted the lowest bid of $1,860,000 but later discovered a clerical error that meant the bid should have been $143,120 higher. After notifying the church of the mistake, Barber attempted to withdraw its bid and sought the return of its bid bond, which the church refused, leading to the lawsuit.

On May 16, 1986, Albert W. Barber informed the architect for the project, William Frank McCall, Jr., that the amount of the bid was in error—the bid should have been $143,120 higher.

Issue

Whether Barber was entitled to rescind its bid upon discovering that it was based upon a miscalculation or whether Barber should forfeit its bond for refusing to execute the contract after the acceptance of its bid.

The question for decision is whether Barber was entitled to rescind its bid upon discovering that it was based upon a miscalculation or whether Barber should forfeit its bond because it refused to execute the contract following the acceptance of its bid by the church.

Rule

Equity will rescind a contract upon a unilateral mistake if the mistake has a material effect on the agreed exchange of performances, and the other party had reason to know of the mistake or the mistake was not due to the fault of the party seeking rescission.

That equity will rescind a contract upon a unilateral mistake is a generally accepted principle.

Analysis

The court found that Barber's mistake was a simple clerical error and that the church had actual knowledge of the mistake before forwarding a contract to Barber. The court applied the principles of unilateral mistake, concluding that allowing the church to benefit from Barber's error would be unconscionable. The court determined that the mistake was material to the contract and that Barber acted promptly in notifying the church of the error.

The mistake in this case was an honest error made in good faith. While a mistake in and of itself indicates some degree of lack of care or negligence, under the circumstances here there was not such a lack of care as to bar relief….

Conclusion

The court held that Barber was entitled to rescind its bid due to the clerical error and that the church was not prejudiced by this rescission. The trial court's denial of Barber's motion for summary judgment was reversed.

We hold that Barber was entitled to rescind its bid.

Who won?

Barber Contracting Company prevailed in the case because the court found that the clerical error did not constitute negligence preventing equitable relief, allowing Barber to rescind its bid.

The court found that the mistake was a 'simple clerical error.'

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