Legal Question in Business Law in California

Re: Is a proposal a binding contract

A binding contract depends on the language of the bid and the language of the acceptance. Please contact our office for an appointment to review your documentation and for consultation. 714 363 0220

Re: Is a proposal a binding contract

Many proposals are written in such a way that the other party can create a binding contract merely by accepting the proposal. Others are written in a way that merely invites formation of a contract. The answer in your case depends upon how the proposal was written.

If your proposal amounts to an offer and if the other side properly accepted, then you have a contract. If that contract says you will have the job done within a certain time frame and does not mention that you could not be sure when the doors would be delivered, then that is your problem and you are in breach if you don't complete the job on time as promised.

The fact that you haven't started working on this job yet is probably not relevant. A contract is formed when the agreement is reached, not when the parties start doing what was agreed to.

Re: Is a proposal a binding contract

I researched this issue for another LawGuru questioner only 2 - 3 days ago. Here's some information that may be more useful than "It depends -- call me."

Let's start with the title to your question, "Is a proposal a binding contract?" No, a proposal seldom, if ever, is a contract in and of itself at the time it's made. A proposal may either be an offer or an invitation to negotiate. If it is an offer, the proposal BECOMES a contract if and when it is accepted by the party to whom made. If it is a mere invitation to negotiate, the party to whom it's made cannot accept it and thus turn it into a contract. How do you tell the difference? I guess by experience, but common sense will allow you to distunguish 99% of the time -- it's based on whatever interpretation seems reasonable and what a reasonable person would expect the author of the proposal had in mind when prreparing and presenting it.

So, a proposal isn't a contract, it's either an offer or an invitation to negotiate. If the latter, it has no legal significance or effect.

Next, however, is an interesting thing about offers. Most offers can be retracted before acceptance, by notifying the offeree. However, an offer made by a materialman or subcontractor to a licensed contractor must be held open and not changed during the bidding process. This is a provision of the commercial code designed to allow contractors to bid with full assurance that they can rely on the pricing in their bids.

In your case, the proposal you made quite possibly became a contract, because it appears from the facts as though the homeowner accepted it before you retracted it.

I suspect you have a contract and the decisive factor may be whether the caveat about delivery date of the doors was a term of the contract. Did you put it in writing? Did you mention the possible delivery-date problem before the proposal was accepted, or not until later?

Another big question is whether you are licensed and whether you got the provisions required to be in writing, in writing. If the answer is NO to either of these, you may have a lot of trouble getting a small-claims judge to sympathize with you.

Re: Is a proposal a binding contract

Basically any attorney in the right mind would say I have to read the documentation before I can tell you what if any your rights are. I think tell you all about contracts and when they take effect or not that you wanna know specifically as to yours. It all depends on the wording of your bid proposal and other factors. Your question has nothing to do with when you started work or not. More importantly, you accepted a job after they took over one month to accept your bid. You knew that there would be a tight period of time between the ordering of the doors and delivery to the job. That may cause a real problem for you. The only advice I continue is yet to what attorney in your area immediately who is knowledgeable about contractor contract law. If you wish to consult with me I am in the San Francisco Bay Area at 925 -- 945 -- 6000.

Re: Is a proposal a binding contract

the nature of your legal question is contingent upon what was included within the agreement between you and the "unreasonable party" you mention within your inquirey. as with most any type of contract, the wording outlining the duties of both parties, as well as the timing of performance, is what typically is controlling. if you would like further assistance in this matter, feel free to contact me directly with more on how your contract is worded for more specific answers.