Legal Implications Of Tender Submission

Relevant legal cases in relation to tender submission

The actual issue in the provided scenario is what would be the contractual status of each specific tender.

In relation to the provide scenario, the case of Spencer v Harding (1870) LR 5 CP 561 would be pertinent case. In the case, it had been ruled that any call for the tenders shall be considered to be an ‘invitation to treat’ (even if one utilizes the terminology ‘offer’). Moreover, in the above said case, the particular advertisement never mentioned that the tender of the highest bid would be accepted, and hence, the advertisement for tenders was an invitation to treat and not an offer. Another pertinent case in this regard would be the case quoted as Harvela Investments Ltd v Royal Trust Co of Canada Ltd [1986] 1 All E.R 261. In this case, the advertisement for tender mentioned and confirmed that if any specific offer that is received, is the highest or maximum offer, then the one giving the contract shall bind itself to such specific offer. In such case, it was ruled by the court that such statement made the advertisement for tender a firm offer, which would be capable of instant acceptance by the highest or maximum bidder, which has to be accepted by the one giving the contract.

The case of Hughes Aircraft Systems v Airservices Australia (1997) 146 ALR 1 can be regarded as a vital case in relation to the provided situation. In this case, it had been stated that if any particular call for tenders encompasses stipulations in relation to procedures, then, such procedures should be strictly adhered to, particularly, in relation to deadlines. The proprietor shall be able to accept any specific tender as long as the tenderers actually adhere to the proper procedure. Another relevant case in this regard would be the case of Westham Dredging Co Pty Ltd v Woodside Petroleum Development Pty Ltd (1983) 66 FLR 14. In this case, it had been said that even when any particular tender is received just few seconds after the deadline, the tender shall not be valid anymore and hence, shall not be considered.

The case of Wegan Constructions Pty Ltd v Wodonga Sewerage Authority [1978] VR 67 can be regarded as a relevant case in this regard. In the case, it had been said that if any tender submission does not comply with the stipulated procedures, then such tender submission shall be rejected and the reason for such rejection should be communicated to the failed or unsuccessful tenderer in a clear manner.  It was also specified in the above said case that if there is any kind of irregularity or anomaly in connection to the tender procedure, then a disgruntled or displeased contractor might have a specific legal claim against such client. In this regard, another vital case would be the case cited as Bains Harding Construction & Roofing (Aust) Pty Ltd v McCredie Richmond & Partners Pty Ltd (1988) 13 NSWLR 437. In the case, it had been specified that the tender procedures should not be underestimated and every detail in relation to the tender procedure should be accurate on the part of the proprietor as well as on the part of the contractors.

Impact of tendering procedures on contractual status

The case of Henthorn v Fraser [1892] 2 Ch 27 can be regarded as an important case in connection to instance of the postal rule concerning acceptance. In the Henthorn v Fraser case, it had been said that in any situation, where the particular parties contemplated that the method of post could be utilized as a way of communicating the specific acceptance in relation to the offer, the acceptance can be said to have been made when the acceptance is posted and in transmission. In this regard, the case of Holwell Securities Ltd v Hughes [1974] 1 WLR 155 is certainly a significant case. In this case, it was stated that normally, the postal rule is applicable in relation to acceptance, however, the question arises when somebody is replying to any ‘invitation to treat’ (for instance, an advertisement); in such regard, whether the postal rule shall be applicable to the reply. It was confirmed in the above said case that the postal rule shall be applicable, except when any distinct intent is demonstrated by the company or individual making a specific ‘invitation to treat’, for instance, if one mentions that a ‘written notice’ is necessary for acceptance, then, in such instance, the postal rule shall not be applicable.

In the provided scenario, several tenders have been received by Moltisanti Property Developers Pty Ltd, after they placed the advertisement (for building the complex) in the national as well as local newspapers. The only condition was that the tenders had to be submitted prior to the conclusion of business on 1^st day of the month of February in 2022. The options were given that tenders could be given by post or hand.

Making application of the cases of Spencer v Harding (1870) LR 5 CP 561 and Harvela Investments Ltd v Royal Trust Co of Canada Ltd [1986] 1 All E.R 261, it should be said that the call for the tenders by Moltisanti should be considered to be an ‘invitation to treat’. Moreover, it should be specified that the particular advertisement by Moltisanti never mentioned any particular condition (like, the tender of the highest bid would be accepted) except the condition relating to time, and hence, the advertisement for tenders was an ‘invitation to treat’ and not an offer. The advertisement by Moltisanti for tender never mentioned or confirmed that if any specific offer that is received, is the highest or maximum offer, then the one giving the contract shall bind itself to such specific offer. Hence, the advertisement was an ‘invitation to treat’ and not an offer, which would be capable of instant acceptance by the highest or maximum bidder.  

Making application of the cases of Hughes Aircraft Systems v Airservices Australia (1997) 146 ALR 1 and Westham Dredging Co Pty Ltd v Woodside Petroleum Development Pty Ltd (1983) 66 FLR 14, it must be stated that the particular call for tenders by Moltisanti encompassed stipulations in relation to the deadline, which was 1^st February in 2022, and hence, such procedures should have been strictly adhered to, particularly, in relation to the above-mentioned deadline. Moltisanti should be able to accept any specific tender as long as the tenderers have actually adhered to the proper procedure. Hence, Dante was the first to post the tender on 20^th January (which was received by Moltisanti on 23^rd January), making them the one that should be accepted by Moltisanti. Leotardo submitted on 1^st February itself. Parisi Bros posted the tender on 27^th January, which was received by Moltisanti on 1^st February. Bacala posted on 1^st February itself, which was received late on 3^rd February.

Adherence to deadlines in tender submission

Applying Wegan Constructions Pty Ltd v Wodonga Sewerage Authority [1978] VR 67, it must be said that the tender submission by Bacala did not comply with the stipulated condition of deadline on 1^st February, and hence, such tender submission was bound to be rejected. Amongst the other tenders, the first one to be posted was that of Dante’s (before Leotardo or Parisi), and hence, the tender of Dante should be accepted.  It may also be specified that there was irregularity or anomaly by Moltisanti in connection to the tender procedure in case of Dante’s tender, and hence, Dante, being the disgruntled or displeased contractor, could have a specific legal claim against Moltisanti. Applying Bains Harding Construction & Roofing (Aust) Pty Ltd v McCredie Richmond & Partners Pty Ltd (1988) 13 NSWLR 437, it should be specified that the tender procedures should not have been underestimated by Moltisanti in case of Dante’s tender and every detail in relation to the tender procedure should have been accurate on the part of Moltisanti. However, it failed to follow the procedure, and because of that Dante’s tender did not resurface until a week after, even when the tender as received on 23^rd January.

Making application of Henthorn v Fraser [1892] 2 Ch 27, it must be said that the tender submission by Dante have been made when the particular tender was posted and made in transmission on the 20^th January. Making application of the case of Holwell Securities Ltd v Hughes [1974] 1 WLR 155, it can be confirmed that the postal rule shall be applicable in case of the tender submissions by the contractors because Moltisanti never demonstrated to make the submissions of the tenders through any ‘written notice’ that shall be accepted. Therefore, considering the postal rule, Dante was the first contractor to submit its tender (on 20^th January). The next contractor to submit the tender was Parisi Bros (on 27^th January). The next two tenders were submitted by Leotardo (by post) and Bacala (by hand) on the 1^st day of the month of February.

Conclusion

To conclude, all the contractors have different contractual status concerning the submission of their tenders. In case of Dante, the tender was submitted on 20^th January, which was received by Moltisanti on 23^rd January, however, due to Moltisanti’ negligence regarding procedures, Dante’s tender did not resurface until after a week. Therefore, initially a contract was established amidst Moltisanti and Dante, and Dante could sue Moltisanti for not accepting their tender. Therefore, the contract with Parisi shall not be considered because they cannot accept Parisi’s tender by rejecting Dante’s. The tenders by Bacala and Leotardo could be rejected as their submissions were after the submissions by Dante and Parisi.

The actual issue in the provided scenario is whether a contractual intent exists to be bound amidst the Mechanical Engineers Association and the Sacrimoni Mechanical Engineering Company Pty Ltd.

The case of Ermogenous v Greek Orthodoc Community of SA Inc [2002] HCA 8 should be considered in relation to the scenario that has been given. In the case, it had been specified that with the presence of intent, any contract shall be considered to be valid. This shall mean that the involved parties should have had the intent and envisioned for any particular agreement to be lawfully binding amidst them.

Criteria for acceptance of tenders

The case cited to be BP Refinery (Western Port) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 can be regarded as a relevant case in relation to the provided scenario. In the case, it had been stated that the courts shall imply the terms into any specific contract in order to give the business efficacy in relation to the particular contract. To state in a simpler manner, the court shall imply the specific terms so that the contract operates or functions in an effective manner and the presumed contractual intent of the involved parties is achieved. However, it was specified in the case that in order for any specific term to be actually implied into any specific contract, the specific implied term should be reasonable and essential in order to establish the contract, proficient of unambiguous expression, and also the term should not contradict any direct term mentioned the contract.

The case cited to be L Schuler AG v Wickman Machine Tools Sales Ltd [1974] AC 235 can be regarded as another important case in connection to the provided scenario. In the case, it was mentioned that in order to determine as to whether anything said is truly portion of the particular contract, one should ask as to whether the involved parties had been serious regarding the statement and whether they actually meant the specific statement to be a portion of the particular contract. This test is regarded as the basic test relating to contractual intention. However, one may still consider the ‘sub-rules’ (such as time and place) in order to determine as to whether a statement would be a specific term or just a mere ‘representation’.

Another pertinent case in connection to the provided situation would be the case cited to be Merritt v Merritt [1970] 1 WLR 1211. In this case, it had been stated that it shall not matter as to whether any particular party in relation to a specific agreement clandestinely never intended to be lawfully bound. It shall also not matter as to whether any party actually denies or refutes an intent by just stating that he or she never intended to be lawfully bound by a specific agreement. What shall matter is what the involved parties have actually stated and performed. One should ask as to whether any reasonable individual consider the agreement as intended and envisioned to be binding upon the particular parties.

In the scenario that has been given, Sacrimoni Mechanical decided to make the one-off payments in respect of Mechanical Engineers Association Superannuation Fund if any of the mechanical engineers are made redundant in next 5 years.

Applying Ermogenous v Greek Orthodoc Community of SA Inc [2002] HCA 8, it should be stated that Sacrimoni Mechanical had the intent and envisioned for the particular statement (regarding the superannuation fund) to be lawfully binding amidst them.

Applying BP Refinery (Western Port) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20, it can be stated that the statement by Sacrimoni Mechanical can be implied into the specific contract in order to give the business efficacy in relation to the particular contract; so that the contract operates or functions in an effective manner and the presumed contractual intent of Sacrimoni Mechanical is achieved. It should be specified that the specific statement by Sacrimoni Mechanical should be actually implied into the specific contract because the statement was reasonable and essential in order to establish the contract, proficient of any unambiguous expression, and did not contradict any direct term mentioned the contract.

Applying L Schuler AG v Wickman Machine Tools Sales Ltd [1974] AC 235, it must be mentioned that the statement by Sacrimoni Mechanical is truly portion of the particular contract because Sacrimoni Mechanical had been serious regarding the statement and they actually meant the specific statement to be a portion of the particular contract. This test is regarded as the basic test relating to contractual intention. Even considering the ‘sub-rules’ like place and time, the statement by Sacrimoni Mechanical would be a specific term of the contract instead of a mere representation.

Making application of Merritt v Merritt [1970] 1 WLR 1211, it can be stated that it shall not matter as to whether Sacrimoni Mechanical clandestinely never intended to be lawfully bound. It shall also not matter as to whether Sacrimoni Mechanical actually denies or refutes an intent by just stating that they never intended to be lawfully bound by the specific agreement. What shall matter is what Sacrimoni Mechanical have actually stated and performed. Any reasonable individual would consider the statement by Sacrimoni Mechanical as intended and envisioned to be binding upon the particular parties.

Conclusion

In the conclusion, a contractual intent certainly exists to be bound amidst the Mechanical Engineers Association and the Sacrimoni Mechanical Engineering Company Pty Ltd through the statement that had been made by Sacrimoni Mechanical Engineering Company Pty Ltd. 

References

Bains Harding Construction & Roofing (Aust) Pty Ltd v McCredie Richmond & Partners Pty Ltd (1988) 13 NSWLR 437.

BP Refinery (Western Port) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20.

Ermogenous v Greek Orthodoc Community of SA Inc [2002] HCA 8.

Harvela Investments Ltd v Royal Trust Co of Canada Ltd [1986] 1 All E.R 261.

Henthorn v Fraser [1892] 2 Ch 27.

Holwell Securities Ltd v Hughes [1974] 1 WLR 155.

Hughes Aircraft Systems v Airservices Australia (1997) 146 ALR 1.

L Schuler AG v Wickman Machine Tools Sales Ltd [1974] AC 235.

Merritt v Merritt [1970] 1 WLR 1211.

Spencer v Harding (1870) LR 5 CP 561.

Wegan Constructions Pty Ltd v Wodonga Sewerage Authority [1978] VR 67.

Westham Dredging Co Pty Ltd v Woodside Petroleum Development Pty Ltd (1983) 66 FLR 14.