Universal Computer Systems v. Medical Services Association of Pennsylvania
United States Court of Appeals for the Third Circuit
628 F.2d 820 (1980)
Medical Services Association of Pennsylvania (Blue Shield) (defendant) solicited computer-lease bids through employee Joel Gebert, who served as the sole liaison for all bidders; Universal Computer System (Universal) (plaintiff) asked Gebert to pick up its bid from the airport on the submission deadline, and Gebert agreed, but on the deadline day told Universal he could no longer do so, causing Universal to lose the contract. Universal sued on a promissory-estoppel theory and won a jury verdict, but the trial court granted Blue Shield's motion for judgment n.o.v., reasoning the jury could not have found reasonable reliance on Gebert's authority because the bidding invitation was subject to federal regulations, while denying Blue Shield's separate motion for a new trial on damages; Universal appealed the judgment n.o.v. and Blue Shield cross-appealed the new-trial denial.
Whether a principal will be estopped from denying that a contract exists when an agent with apparent authority to act on behalf of the principal makes a promise to another party reasonably anticipating that they will rely on that promise and the other party acts in reliance on that promise to their detriment.