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Holman Erection Co. v. Orville E. Madsen & Sons, Inc.

Supreme Court of Minnesota
330 N.W.2d 693 (1983)


Facts

A city solicited bids for the construction of a water treatment facility. Orville E. Madsen & Sons (Madsen) (defendant) decided to bid on the general contract, so he solicited bids for the necessary steel erection. Holman Erection Co. (Holman) (plaintiff) prepared a bid and, in conformance with an industry practice designed to prevent bid-shopping, submitted its bid to Madsen by telephone shortly before the general bid was due. Madsen used Holman’s bid in preparing its own bid for the general contract and, as the city required general contractors to list all potential subcontractors, listed Holman as its subcontractor on its bid. Madsen was awarded the general contract and awarded the steel subcontract to Van Knight, partially on the basis that Van Knight was a minority business, and the general contract required that an effort be made to have a portion of the work done by minority businesses. Van Knight also agreed to provide substantial labor and materials that Holman had not. When Holman learned the subcontract had gone to Van Knight, Holman brought suit against Madsen, alleging that Madsen had accepted its bid and that in awarding the subcontract to another company had breached a binding contract. Holman appealed from a grant of summary judgment to Madsen.

Rule of Law

Issue

Holding and Reasoning (Yetka, J.)

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