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The School District (P) sent out a notice to bid intending to purchase a computer. CIS (D) responded with an offer to deliver a computer by the end of July. P accepted D’s offer. D failed to acquire a satisfactory computer by July and failed to deliver. The defeated bidder’s offers to sell to P remained opened by P’s requested terms until July 12th. On that date, P knew that D had not yet formally refused to perform and in fact, D was actively negotiating to obtain a computer from a third party. P chose to let the other offer lapse and hoped D would obtain and deliver the computer by July 31st. P sued D for breach. The district court found that P had acted in good faith and reasonably. Nonetheless, that court found that it would have been more reasonable to accept the second-best offer on July 12 and thus limited the damages to P to $12,403.06 and not the $60,000 difference obtained from the winner of the second bidding contest. P appealed.

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