Note: Cape Environmental Management, Inc. (Contractor) negotiated with International Waste Industries Corporation (Vendor) over a contract to build incinerators in connection with a solid waste management facility at Camp Bastion, Afghanistan for the U.S. Air Force. During negotiations, Contractor sent Vendor a purchase order (PO) that included Vendor's bid proposal, description of a commercial LC required by Vendor, and Contractor's terms and conditions. The Contractor's terms and conditions included an integration clause stating the written contract was complete and excluded any prior, additional, or conflicting terms and conditions.

Both parties signed the PO but continued to negotiate the terms and conditions of the contract. Contractor demanded a scheduled visit to evaluate Vendor's financial situation. Vendor informed Contractor that it had subcontracted with another party for the manufacture of incinerators and that inspecting that party's site might be possible, but the visit never occurred. Contractor sent a letter to Vendor cancelling the PO because Vendor "cancelled the visit that [Contractor] considered necessary" and informed Vendor that "we will not establish the [LC] nor advance any funds..." Contractor then sought alternative bids.

Vendor sued Contractor for breach of contract, quantum meruit, detrimental reliance, unjust enrichment, and intentional misrepresentation. Contractor moved for summary judgment. The United States District Court for the District of Maryland, Southern Division, Williams, Jr, J., granted Contractor's motion for summary judgment on all counts.

The Judge granted summary judgment because: (1) Vendor failed to produce material evidence the contract was binding, (2) Contractor's use of Vendor's bid to obtain a contract and eventually contract with another party was not unjust, (3) Contractor did not know Vendor intended to be compensated, and (4) Contractor never promised to award the contract to Vendor.



The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.