Universal By-Products, Inc. v. City of Modesto

Appellant appeals from a judgment dismissing its amended complaint against respondent for damages allegedly arising out of a fraud, a breach of contract and a conspiracy. The trial court sustained a general demurrer to each cause of action. We affirm.

The basic issue is whether a municipality, having elected to submit to competitive bidding an exclusive contract for garbage collection within the city, and having expressly reserved the right to reject all bids, incurs a liability by way of tort or breach of contract to the low bidder upon rejecting the bids. We hold that it does not.

The salient facts giving rise to appellant’s action are as follows: On March 15, 1971, the respondent issued a notice to bidders that it would receive bids for the granting of an exclusive license to provide garbage collection services within the city for a term of eight years. The notice and accompanying specifications and instructions stated that each bid had to be accompanied by a $10,000 bond, that a bid could be withdrawn at any time prior to, but not for 60 days after, the date of the opening of the bids, that the city reserved the right to reject any or all bids, and that the granting…