James Baird Co. v. Gimbel Bros.
64 F.2d 344 (2nd Cir. 1933)

  • Gimbel, was a linoleum seller.  He heard that Pennsylvania, was building a new building.  Gimbel sent an employee to calculate how much linoleum would be needed for the building.
  • Gimbel sent out offers to a bunch of contractors who they figured might be bidding on the contract to build the building.  The offer was to supply all the linoleum necessary to build the new building.
    • Gimbel had made a mistake as to how much linoleum was needed (they thought only half as much was needed as actually was required), so their offer price was basically half of what it should have been.
  • Baird, having received Gimbel’s offer, put in a bid to build the State building based on that offer that same day.  Gimbel telegraphed all the contractors to let them know of the mistake.  But the State had already accepted Baird’s offer, and Baird sent the Gimbel an acceptance.
  • Gimbel denied that a contract had been made, and Baird sued for breach of contract.
    • Baird argued that that it was understood that the contractors would be making bids in reliance on the Gimbel’s offer to supply linoleum. (promissory estoppel)
  • The Trial Court found for the Gimbel.  Baird appealed.
  • Appellate Court affirmed the decision.
  • Appellate Court found that there was no contract between the parties because putting in a bid could not be construed to constitute an acceptance.
    • Baird was under no obligation to buy Gimbel’s linoleum if they didn’t win the contract (or even if they did).  The Court found that promissory estoppel is a one-sided obligation, and not appropriate in a business context.
    • Restatement § 90 doesn’t apply because Gimbel was bargaining for an acceptance, not a bid.
      • Gimbel offered to deliver linoleum to Baird in exchange for Baird’s acceptance of the offer, not for Baird’s bid to the State of Pennsylvania.  “The offer could only become a promise to deliver when Baird promised to take and pay for it.”  Therefore, the offer had not been accepted when Gimbel canceled the offer.
    • This case came up in the early days of promissory estoppel, and at the time it was mostly used for charitable contributions and family situations.  The Court at this time didn’t feel that it was appropriate in a business context.