STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

April 7, 1969

A. William Spiry
State's Attorney, Marshall County
Britton, South Dakota 57430

OFFICIAL OPINION NO. 69-33

Contracts, schools and school districts, bids and bidders and mistake

Dear Mr. Spiry:

We have your request for an official opinion with respect to the following statement of facts:

"On March 7, 1960, the Britton Independent School District had a bid letting for certain improvements to the school building. The following bid were submitted: Kyburz Construction Company, after Alternate #1 deduction, $93,130.00; Gray Construction Company, after Alternate #1 deduction, $106,200.00; Martinson Construction Company, after Alternate #1 deduction, $119,425.00. The bid of Kyburz Construction Company was accepted at that time. The next morning Kyburz Construction Company reported to the school district's architect that there had been an error in transferring the figures from their worksheet to the actual bid. They presented the worksheet to verify the error. The electrician worksheet submitted to Kyburz Construction Company listed a deduct of $516.10 on Alternate #1. On the Kyburz Construction worksheet the figure was listed as $5,160.10 for an error of $4,644.00. This would reduce the deduction on Alternate #1 from $10,540.00 to $5,896.00. The bid comparison on the alternative with the error corrected on the Kyburz Construction Company bid would be: Kyburz Construction Company, $97,774.00; Gray Construction Company, $106,200; Martinson Construction Company, $119,425.00."

You state that the school district is satisfied that an error did occur in Kyburz Construction Company's final calculations.

Your question is whether or not the school board can allow the adjustment and accept Kyburz Construction Company's bid on the basis of the corrected amount.

You quote the case of School District of Scottsbluff v. Olson Construction Company, 45 NW 2d 164. The situation in the Scottsbluff case was not entirely analogous to our situation here as the school district in that case refused to recognize the error and brought action against the contractor for failure to comply with the bid and to construct the building contracted for. The trial court held against the plaintiff school district and for the contractor on the grounds that where a mistake is so fundamental that the minds of the parties to the contract have not, in fact, met, or where an unconscionable advantage had been granted by mere mistake, equity should intervene to prevent intolerable injustice.

This Nebraska case was cited with approval by the Supreme Court of South Dakota in Beatty v. DePue, 103 NW 2d 191.

Your question is not whether or not the school board can rescind the bid, but whether there can at this time be a reformation by adding the amount of the mistake to the bid. Kyburz would have been the low bidder had they submitted the correct amount in the first place.

In our opinion, the contract cannot be reformed. There cannot be a reformation of this contract for the unilateral mistake. To entitle a party to reformation for a mistake, it must appear to have been mutual. (See 17 CJS Section 143, page 891.) The school district was in no way to blame.

While the school board has the authority and could legally reject the bid as submitted, they cannot at this time reform the bid and we believe that the provisions of Section 13-20-8 of SDCL 1967 would apply.

Respectfully submitted,

Gordon Mydland
Attorney General