Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 13

In May, Watts was awarded a construction contract, based on its low bid, by the Cullman County Commission. The contract provided that it would not become effective until approved by the state director of the Farmers Home Administration (now part of the U.S. Department of Agriculture Rural Development Office). In September, construction still had not been authorized and Watts wrote to the County Commission requesting a 5 percent price increase to reflect seasonal and inflationary price increases. The County Commission countered with an offer of 3.5 percent. Watts then wrote the commission, insisting on a 5 percent increase and stating that if this was not agreeable, it was withdrawing its original bid. The commission obtained another company to perform the project, and on October 14, informed Watts that it had accepted the withdrawal of the bid. Watts sued for breach of contract. Explain whether Watts will prevail and why or why not.