United States Ex Rel. J. C. Schaefer Electric, Inc. v. O. Frank Heinz Construction Co.
300 F. Supp. 396 · District Court, S.D. Illinois · 1969
Facts
Schaefer, an electrical subcontractor, submitted a bid to Heinz, a general contractor, for a government construction project. Heinz used Schaefer's bid to secure the government contract, and after an attempt to substitute subcontractors was denied, instructed Schaefer to proceed with the work at the quoted price. Schaefer performed the electrical work, and Heinz issued numerous change orders reflecting Schaefer's original bid price, but later refused to pay the full balance, arguing no fixed-price contract existed.
Issue
Did the general contractor's (Heinz) conduct, including instructing the subcontractor (Schaefer) to proceed with work at the quoted price and subsequently issuing change orders based on that price, constitute acceptance of a fixed-price contract as a matter of law, despite the general contractor's later denial of explicit agreement?
Holding
Yes, the court held that Heinz's conduct established an implied contract with Schaefer at the originally quoted price, as adjusted by change orders. The court granted summary judgment for Schaefer, ordering Heinz to pay the unpaid balance.
Rule
An implied-in-fact contract can be established by the parties' acts and conduct, even without explicit written or oral acceptance, where such conduct unambiguously manifests an intention for one party to perform and the other to compensate at a specific price. A 'meeting of the minds' through unequivocal acceptance is not required for an implied contract.
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