United actually received all of the first five joint checks, it would have been paid in full as of July 1972. Steiner admitted he had not requested any payments in writing form Olsen during the period July 6 to October 24,1972. During this period checks were issued to All Service alone totaling $6,809.55. To summarize these various transactions:
(1) Through June of 1972, United was paid by Olsen for all materials supplied.
(2) Between July and October, 1972, United made heavy shipments to the job, but was not paid by All Service or Olsen during this time.
(3) In October Olsen paid United $7,200,6 which was not nearly enough to bring United’s account up to date.
(4) Olsen paid other electrical subcontractors $2,892 of the remaining contract funds from November of 1973 to October of 1974 to complete the project.
(5) Olsen paid the remaining contract balance of $1,457.05 into the court for eventual payment to United.
Olsen completed the job, was paid in full by Rivers, and has been discharged from all obligations under the general contract.
At trial United argued for the position that all checks from Olsen to All Service should have been joint checks, while Olsen contended that the “invoice” condition had not been complied with by United. The key factual findings made by the district court are Nos. XV and XVI:
“That to the extent Olsen received either invoices or statements from United, and had money owing to All Service, Olsen issued dual checks payable to both All Service and United thereby complying with its said letter of December 21, 1971 to United. To the extent that it has not been paid for materials supplied to the Carnegie Library project, United made its own loss possible by not submitting invoices or statements to Olsen for materials supplied so that dual checks could be issued.”
“That there was no contractual relationship between Olsen and United either express or implied which would require Olsen to pay for all materials supplied by United to the project. That based on the invoices supplied to Olsen by either All Service or United, Olsen made joint payments for materials supplied by United. That Olsen’s obligation to All Service has been fully satisfied and discharged, and Olsen has no obligation to pay any additional amounts to United.”
We find the legal issue presented to be: Is United entitled to judgment against Olsen for unpaid materials based upon contractual liability or promissory estoppel?
The difficulty with the claim in contract is that United was under no obligation to Olsen to supply the materials, even given the agreement as to joint cheeks. At most United was contractually obligated to All Service, since it had submitted a bid to All Service. Had United declined to supply materials to the project, even after the joint check arrangement was concluded, it is clear that Olsen could not have sued United for breach of contract. Thus, while Olsen’s promise to issué joint checks was not gratuitous, in the sense that it was for the purpose of inducing United’s cooperation on the project, United was not mutually obligated to Olsen to perform. In these circumstances the joint-check agreement is not supported by mutuality of obligation and cannot rise to the level of express contract.
In this case, however, the doctrine of promissory estoppel applies. This doctrine is defined by Restatement, Contracts (2d), § 90, as follows:
“A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy for breach may be limited as justice requires.”
6
The October 20 joint check for $4,500 was also illegally cashed by All Service.