Question

Using the Issue, Rule, Analysis, Conclusion outline, I'm having trouble creating the IRAC for this situation....Happy City opened bidding for an airport construction project, by the usual process of advertising a request for bids. Crafty Construction submitted the lowest responsive bid. When the Happy City Council met to review the bid the Council members discovered the bid exceeded the budget for the project and discussed the possibility of negotiating a bid reduction. The city manager told the Council that Chris Crafty, owner of Crafty Construction, objected to further negotiations until Happy City formally awarded the contract to Crafty Construction, taking the position Happy City should award the contract in the amount of the original bid and afterward negotiate reductions in the scope of the work and/or contract price by submitting “work change orders” authorized by the contract. The City Council decided to award the contract to Crafty Construction “on the condition that the parties negotiate the work and price to bring it within the City’s budget;” adding that if Crafty would not participate in the negotiations, the City would rebid the project. Thereafter the City’s public works director suggested changes to Chris Crafty that would cut $100,000 from the project price to bring it within budget. Chris Crafty stated she felt she could do the reduction but was not prepared to discuss specifics. The next day Chris informed the public works director that she was confident that the price reduction of $100,000 could be accomplished based upon something like the suggested changes once a contract was signed. No further discussions occurred, and nothing was signed. Happy City eventually announced it would reject all bids, including Crafty Construction’s, as over-budget and rebid the project. Subsequently, Crafty Construction claimed it had a contract for the project, which Happy City breached by rebidding it. Happy City claims no contract ever existed. Who wins and why?

Answer 1

Isssue: Ther contract between Happy City and Crafty Construction for reduction of price of $100000 was entered or not

Rule:  

1) Invitation to offer is an action inviting other parties to make an offer to form a contract.

2) Offer-A promise to do or refrain from doing something in exchange for something else

3) Acceptance- An express act or implication by conduct that manifests assent to terms of an offer in a manner invited or required by the offers so that a binding contract is formed

4) Conditional acceptance-sometims called qualified acceptance occurs when a person to whim an offer is made tells the offerer he or she is willing to agree to the offer provided that some changes are made in its terms or that some condition or events occur.

5) Contract is valid when there is Valid offer and accptance and It can be oral or written and other essential elements of contract are fulfilled

Analysis:

1) Happy City has made an invitation to offer to the public for construction of airport

2) Many has given offer for construction of airport to Happy City. But one of these offer from Crafty construction ha lowest price of bid. However, It exceeds the budget of Happy City

3) Happy City has given acceptance to the offer made by Crafty construction with some condition which is called conditional acceptance."The City Council decided to award the contract to Crafty Construction “on the condition that the parties negotiate the work and price to bring it within the City’s budget;” adding that if Crafty would not participate in the negotiations, the City would rebid the project.

4) Original contract has been entered based on condition that given by Crafty construction Chris Crafty, owner of Crafty Construction, objected to further negotiations until Happy City formally awarded the contract to Crafty Construction, taking the position Happy City should award the contract in the amount of the original bid and afterward negotiate reductions in the scope of the work and/or contract price by submitting “work change orders” authorized by the contract.

5) The valid original contract has been entered between Happy City and Crafty Construction based on conditions specified in authorised contract. Now contract is legal binding between both parties and both parties have right to sue each other if they will overrule the term and condition of contract.

Conclustion: Happy City has voilated the terms of contract by rebid the project. Even Crafy construction has informd about confident of reduction of $100000 to Happy City based on someting. Now the contract is voidable at the option of Crafty Construction and It has right to sue the Happy construction for breach of contract.