Legal Blog

back up

Combined Air Mechanical Services v. Computer Room Services Corp., 2015 ONSC 610

General agreed to incorporate sub’s price and work together on bidding the prime contract. General carried the price in its bid to the owner, listed the sub and another sub as the possible mechanical subs, and listed the sub’s project manager in its bid to the owner. After general was awarded the contract, general obtained another quote from another sub, which was far lower than the first, and cut out the first sub. The judge held that the general breached contract A.

He also held that the general breached its duty of honesty and good faith; it issued its quote to the owner using the sub’s bid, knowing it had no intention of using the sub if it could find a lower price, but kept the sub in reserve to do the work if it could not. The sub was awarded its lost profit calculated as follows:

bid price less actual cost of the sub who actually was given the work.

In addition, the sub was given its profit on all extras.