Huntington Beach Union High School District v. Continental Information Systems Corp.

The district court found that Continental Information Systems Corp. (CIS) breached its contract to deliver a computer to the Huntington Beach Union High School District (School District), and awarded damages. 452 F.Supp. 538 (C.D.Cal.1978). We affirm in part and reverse in part.

I. Contract and Breach

The School District, intending to purchase a computer, sent out a Notice Inviting Bids. CIS, a computer broker, responded with what the district court held was an offer to deliver a satisfactory computer by the end of July, and the School District formally accepted. CIS failed to acquire a satisfactory computer by July, and therefore failed to deliver. The School District had allowed the other bidders’ offers to expire on July 12, so it had to rebid the contract. The winning bid in the second contest was almost $60,000 higher than CIS’s contract price.

The district court’s jurisdiction over the School District’s suit was based on diversity of citizenship. The substantive law of California governs the contract and damages issues.

A. Adequacy of the Offer

CIS argues that its response to the Notice Inviting Bids was too ambiguous and sketchy to constitute a valid offer, and that…