Contract | Formation
Offer: Tenders
Revision Note | Degree
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Introduction
- when a service is required several contractors may be asked to give a quotation for the cost of carrying out the work (tenders)
- general rule is that requests are an invitation to treat and tenders are offers, which may be accepted
Spencer v Harding (1870) LR 5 CP 561
Facts:
- defendant (D) sent circular seeking tenders to buy stocks
- plaintiff's (P) tender was highest but D refused to sell to P
Issue:
- had there been an offer made by the defendant?
Held:
- circular was a
mere proclamation
that D was interested in negotiating sale of the stocks and receiving offers - P's claim failed
- Willes J noted there was no unilateral contract as no wording such as
and we undertake to sell to the highest bidder
Unilateral contract
- an invitation for tenders may constitute an offer of a unilateral contract
Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195
Facts:
- D invited tenders to operate flights, tenders had to be submitted no later than noon on 17 March 1983
- claimant (C) posted tender in Town Hall letter box at 11am on 17 March 1983, letter box was due to be collected at noon but was not
- D did not consider C's tender as it was wrongly recorded as a late submission
Issue:
- could C sue for breach of an implied promise that tenders returned on time would be considered?
Held:
- Court of Appeal found invitation was an offer to consider any tender which was submitted as required and tenders correctly submitted would be acceptance of that offer
- there was a unilateral contract, binding D to consider C's tender
- Lord Bingham:
It is of course true that the invitation to tender does not explicitly state that the Council will consider timely and conforming tenders. That is why one is concerned with implication. But the Council does not either say that it does not bind itself to do anything, and in the context a reasonable invitee would understand the invitation to be saying, quite clearly, that if he submitted a timely and conforming tender it would be considered, at least if any other such tender were considered...
- decision highlighted that only a select few were invited to put forward tenders
in a clear, orderly and familiar procedure
, seems these factors form an important part of reasoning allowing term to be implied - decision is controversial, unclear exactly when invitations for tenders will be subject to implied term