A general contractor relies on a subcontractor’s bid to prepare a project bid. The subcontractor later demands higher remuneration after the contract is awarded. The general contractor seeks relief on the basis of promissory estoppel. Which statement is correct?

• A. Yes, because the general contractor detrimentally relied on the subcontractor’s bid.
• B. No, because bids are only invitations to negotiate and not binding.
• C. Yes, because the subcontractor’s bid constructs an enforceable contract.
• D. No, because reliance on bids is generally not enforceable.

Answer: (A)

Promissory estoppel applies when a promise leads someone to rely on it to their detriment, and it would be unjust not to enforce the promise. Here, the subcontractor’s bid functions as a definite price that the general contractor used to prepare its own project bid. The contractor invested time, money, and other resources in reliance on that bid, hoping the project would proceed at the stated price. When the subcontractor later demands more money after the contract is awarded, the contractor would face unjust consequences if relief isn’t available. So relief is appropriate because the reliance was detrimental and foreseeable. Although bids are often treated as invitations to negotiate, promissory estoppel recognizes that reliance on a bid can be enforceable to avoid injustice. It’s not that a bid itself automatically creates a binding contract; promissory estoppel is about enforcing relief for reliance, not about turning a bid into a contract.