Church Property – Part 1

Church Law and Tax 1989-09-01 Recent Developments Church Property Richard R. Hammar, J.D., LL.M., CPA

Church Law and Tax 1989-09-01 Recent Developments

Church Property

What recourse does a church have if the low bidder on a church construction project attempts to withdraw its bid on the basis of an alleged computational error? That was the issue before a Georgia state appeals court in a recent case. The church invited bids for the construction of a new facility, and warned bidders (in the bidding instructions) that “negligence on the part of a bidder in preparing the bid confers no right for the withdrawal of the bid.” The contractor that made the lowest bid was awarded the contract. However, a few days later it informed the church that it was withdrawing its bid on the basis of “an error in adding certain estimated costs.” The church sued, arguing that the contractor had agreed that negligence on its part would not excuse an erroneous bid. A trial court rejected the church’s motion for a summary judgment, and the church appealed. A state appeals court ruled that the contractor did have a legal right to withdraw its bid. It observed that a contractor may withdraw an erroneous bid if (1) the other party knew (or should have known) of the mistake and attempts to “snap up the offer and profit thereby,” or if (2) the following conditions are satisfied: (a) the mistake is of such a nature that enforcement of the contract, under the circumstances, would be “unconscionable” (i.e., shocking to the conscience); (b) the mistake relates directly to the obligation assumed by the mistaken party; (c) the other party would not be prejudiced or harmed by the withdrawal of the mistaken bid. The court acknowledged that the church was not aware that the lowest bid was mistaken (it was only 7% lower than the next lowest bid), but it did conclude that the other factors necessary to justify the withdrawal of a bid were present. Specifically, the mistake related to the nature of the contractor’s obligation under the contract, the church was not prejudiced by the withdrawal of the bid (“it lost only what it sought to gain by taking advantage of the contractor’s mistake”), and allowing the church to take advantage of the mistake “would not be just.” With regard to the warning in the bidding instructions that negligence in the preparation of a bid would not enable a contractor to withdraw a bid, the court simply observed that “provisions such as these have … never been held effective when equitable considerations dictate otherwise.” First Baptist Church v. Barber Contracting Co., 377 S.E.2d 717 (Ga. App. 1989).

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay
caret-downclosefacebook-squarehamburgerinstagram-squarelinkedin-squarepauseplaytwitter-square