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    Contracts Keyed to Murray

    Huntington Beach School District v. Continental Information Systems Corp.

    Facts

    The Huntington Beach Union High School District (Plaintiff) issued a notice inviting bids for a new computer. The notice stated that Plaintiff had ordered peripheral equipment for the anticipated computer. Continental Information Systems Corp. (Defendant) submitted the winning bid, offering to provide the new computer by July 31. The second-place bid was $12,403.06 higher than Defendant’s bid. The other bids remained open until mid-July, at which point Defendant had not yet delivered the new computer. Plaintiff allowed the other bids to expire in mid-July. Defendant failed to deliver the computer by July 31. Plaintiff opened another round of bids, with the winning bid in the second round $59,424.66 higher than Defendant’s original contract price. Plaintiff sued Defendant. The district court found that Plaintiff had acted reasonably and in good faith, but limited Plaintiff’s damages to $12,403.06, finding that it would have been more reasonable for Plaintiff to accept the second-best offer before it expired. The district court also awarded Plaintiff damages to cover the cost of three months of renting peripheral equipment for the new computer, which was unusable because of Defendant’s failure to deliver the computer.

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    Huntington Beach School District v. Continental Information Systems Corp.