Quake Construction, Inc. v. American,

565 N.E.2d 990 (1990)

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Nature of the Case

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Facts

In February 1985, D hired Jones (D1) to prepare bid specifications, accept bids, and award contracts for construction of the expansion of American's facilities at O'Hare International Airport. P received an invitation to bid. It submitted its bid to D1. D1 orally notified P that it had been awarded the contract for the project. D1 then asked P to provide the license numbers of the subcontractors P intended to use on the project. P notified D1 that the subcontractors would not allow P to use their license numbers until P submitted a signed subcontract agreement to them. D1 sent P a letter of intent dated April 18, 1985. The letter stated that P had been awarded the contract and that an agreement was being prepared. It detailed out the general scope of the work and referenced P's bid and the specifications on the bid subject to negotiations on hollow metal doors and interior ceramic floor tile. P was to provide evidence of liability insurance in the amount of $5,000,000 umbrella coverage and 100% performance and payment bond to D1 before commencement of the work. D1 reserves the right to cancel the letter of intent if the parties cannot agree on a fully executed subcontract agreement. P and D1 discussed and orally agreed to certain changes in the written form contract making handwritten delineations. D1 advised P that it would prepare the written contract for P's signature. A preconstruction meeting was held, and everyone present was told that P was the general contractor for the project. On the same date and immediately after the meeting, D informed P that P's involvement was terminated. D1 confirmed P's termination by a letter dated April 25, 1985. P sued Ds alleging damages for the money it spent in procuring the contract and preparing to perform under the contract, and its loss of anticipated profit from the contract. In count I, P sought damages for breach of contract. P based counts II, III, and IV on detrimental reliance, waiver of condition precedent, and impossibility of contract, respectively. Ds moved to dismiss. It was granted. On appeal, the Appellate Court with one justice dissenting reversed the dismissal of counts I, II and III, affirmed the dismissal of count IV, and remanded the case to the circuit court.