Legal Question in Business Law in California
Bid laws applying to subcontractors
If a company, hereinafter referred to as ''employer'' has a work order to be completed by a subcontractor, and requires a bid from said subcontractor to be submitted to employer, can the employed submit a lower bid to a competitor of employer, fully knowing that by doing so, employer would lose credibility of the client issuing work order? Significant damage has occurred to reputation of client/employer relationship resulting in the loss of 40% in order volume and subsiquently a loss of revenue of $1M+ per month . This is in CA. The employed subcontractor is a licensed general contractor in CA.
2 Answers from Attorneys
Re: Bid laws applying to subcontractors
No, the employed subcontractor cannot engage in this conduct and in so doing has given the employer claims he can assert against the employed subcontractor. The claims are commonly referred to as business torts and include interference with contract, interference with prospective economic relations and violation of Business and Professions Code Sec. 17200 which prohibits any unlawful or unfair business practice. Other claims may also be available.
If successful, the employer could recover for the lost business as well as require the employed subcontractor to disgorge his profits to the employer.
For a more in depth evaluation of your case, please feel free to contact mt office directly. The initial consultation is always free. We practice construction and business law.
Best of Luck!
Re: Bid laws applying to subcontractors
The short answer is that it depends on the specific facts.
The action may give rise to a variety of business torts, or it may be totally within their rights.
This may not be a satisfying answer, but I can discuss this with you in more detail if you email me.
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