This case arises out of competitive bidding on public construction work. Cataldo Construction Company (Cataldo) is a general contractor having its business office in Orange. In response to advertising by Essex County (county), Cataldo submitted, on May 22, 1969, a bid of $24,233 for work to be done on the lower Chatham Bridge, which spans the Passaic River between Morris and Essex Counties. To its bid Cataldo attached a certified deposit check in the amount of $2,500, as required by the instructions to bidders.
When the bids were opened on May 22, 1969 the Cataldo bid was found to be the lowest of those submitted. A resolution of the board of freeholders of Essex formally approved the award of the contract to Cataldo that same day. Although the advertisements soliciting bids made no mention of any active participation in the project by Morris County, the Essex resolution was expressly made contingent on a concurring resolution by the board of freeholders of Morris County. Such a concurring resolution was adopted in Morris six days later, on May 28, 1969.
Cataldo's bid had been prepared hurriedly to meet the advertised deadline. As a result of the haste a serious mistake was made in the figure submitted. One of the amounts transferred from Cataldo's work sheet to its sheet for totals was mistakenly listed at $13,822, rather than at $23,822, as it should have been. The mistake was then carried over to the typewritten proposal, which was delivered by hand to the county a few moments before bids were opened.
The $10,000 mistake was discovered the day after the bids were opened and the Essex resolution adopted, but five days before the adoption of the Morris resolution. No proofs have been offered as to whether Cataldo (1) knew at this stage that the Essex resolution was contingent on concurrence by the freeholders of Morris County, and (2) made any efforts
to notify the proper parties in Morris before the adoption of that county's resolution. It is clear, however, that immediately upon the discovery of the error Cataldo's president telephoned the Essex County engineer to explain the mistake. A few days later, apparently before the Morris resolution was adopted, Cataldo's president met with the Essex engineer, showed him the work sheets, and was told nothing could be done to correct the error. By letter dated May 28, 1969 Cataldo again gave Essex County notice of the error and requested that its bid be withdrawn.
Essex County has refused to rescind the bid and return Cataldo's deposit check. Cataldo commenced this action as a result, naming Essex County as the sole defendant. Both parties are treating the dispute as a matter solely between themselves and not involving Morris County.
Cross-motions for summary judgment are before the court. Cataldo seeks rescission of the bid and return of the deposit; the county asserts that the bid should not be rescinded and that it is entitled to retain the deposit as a forfeiture for Cataldo's failure to sign a contract and perform the work at a price of $24,233. There are no issues of fact, as the county's brief admits all of the facts as stated by Cataldo.
The law is clear that a competitive bid is an option based upon a valuable consideration, namely the privilege of bidding and the legal assurance to the successful bidder of an award as against all competitors. Conduit & Foundation Corp. v. Atlantic City , 2 N.J. Super. 433, 438 (Ch. Div. 1949); Lupfer & Remick v. Freeholders of Atlantic , 87 N.J. Eq. 491, 497 (Ch. 1917). As such, the bid is both an offer and a unilateral contract; when it is accepted, it becomes a mutually binding contract. Conduit & Foundation Corp. v. Atlantic City, supra , at 439; Schlein v. Gairoard , 127 N.J.L. 358, 359 (E. & A. 1941). So here, the acceptance of Cataldo's bid by the appropriate governing bodies of Essex and Morris Counties created a valid contract.
The question becomes, then, whether Cataldo is to be relieved in equity from the obligations ...