4760 ASSIGNMENT TWO

Due Monday, March 11 noon

No extensons, Must !e "" su!#tted, n Word
$erson Mar 04, %01&
[25] An Ontario municipality (the Owner) decided to update and expand its water treatment
facilities. To do so, the Owner inited competitie tenders from contractors for the
construction of the new facility
The Owner!s consultant on the pro"ect desi#ned the facility and prepared the Tender
$ocuments to %e #ien to potential contractors interested on %iddin# on the pro"ect. The
Tender $ocuments included the &lans and 'pecifications, the Tenderin# (nstructions, which
descri%ed the tenderin# procedure and other re)uirements to %e followed %y the %idders, the
Tender *orm to %e completed %y the %idders, the form of written contract that the successful
contractor would %e re)uired to si#n after %ein# awarded the contract and a num%er of other
documents.
Accordin# to the Tenderin# (nstructions, each tender %id was to remain +firm and
irreoca%le and open for acceptance %y the Owner for a period of ,- days followin# the last
day for su%mittin# tenders.. The Tenderin# (nstructions also proided that each %idder was to
include with its tender, a certified che)ue for /2--,--- paya%le to the Owner as a tender
deposit. (n addition, the Tenderin# (nstructions contained the followin# proision descri%in#
the circumstances in which the Owner would %e entitled to retain the tender deposit0
+The %idder #uarantees that if its tender is accepted %y the Owner and the Owner does not, for
any reason whatsoeer, receie the 1ontract si#ned %y the successful %idder within 2 days
after the successful %idder has %een represented with the 1ontract for si#nature, the Owner
may retain the tender deposit for its own use and may accept any other tender..
345 su%mitted its tender in accordance with the Tender $ocuments. Approximately 6-
minutes after the tender closure time, 345 discoered that it had made a clerical mista7e in
preparin# its tender0 345 had mista7enly copied a fi#ure from a calculation sheet. $ue to the
error, 345 omitted an amount of /8--,--- from its tender price of /9,9--,---. (mmediately
on discoer of its error, 345 contacted Owner and told him they wished to withdraw their
tender. 345 and the Owner a#reed that the clerical error was #enuine0 howeer the Owner
refused to permit 345 to withdraw its tender.
:ithin 2 wee7s, the Owner announced that it had awarded the contract to 345, who was
the lowest %idder and presented 345 with the contract for execution. 345 refused to si#n
the contract. The owner then awarded the contract to the next lowest %idder, for a price of
/9,,--,---.
6. :hat potential lia%ilities in contract law could arise in this case;
The potential lia%ilities that are present is this case is %reach of contract %y 345,
this is due to the fact that the owner clearly demonstrated throu#h the tender
pac7a#e the rules associated with participatin# in the %iddin# process. The rules
within the contract state that when a %id is selected, a pac7a#e must %e si#ned
within seen day and sent to the owner to le#ally %ind the a#reement, this fact
demonstrated that it is the %idders responsi%ility to effectiely accept the term and
si#n the document. *ailin# to do so would result in the forfeitin# of the deposit of
/2-- --- su%mitted to enter into the %iddin# process.
As demonstrated in the <elle =ier >s ?aufman, it was su##ested %y a "ud#e that
a "ust and reasona%le man will no profit %y the mista7es of others. Therefore 345
may hae a case to refund its deposited money. @oweer the owner may ar#ue that
he was not aware of the flaw within the tender su%mission #race period, and that
the tender contract pac7a#e consisted of all the a#reements set forth %y the owner
to eliminate such conflict %etween tender %idders.
2. :ould the Owner %e entitled to claim from 345;
As is demonstrated %y the case of =on An#ineerin# s. the Bueen, where the
contractor =on An#ineerin# under )uoted the %id %y /25- ---. The %id a#reement
and participation of the %idders followed a similar case scenario, where there were
contractual rules set out for the %idders to follow. (nitially =on An#ineerin# won
the case, howeer the supreme court ruled a#ainst this %ecause as stated %y the
"ud#e +An adertisement for tender is an offer that is accepted when the tender is
su%mitted and a contract is formed that precludes the contractor from withdrawin#
their %id. therefore 345 will pro%a%ly not %e entitled to receie the money spent
on the deposit. And therefore the owner may 7eep the money proided to enter the
%iddin# a#reement.

9. @ow would the amount of the claim %e calculated;
There would %e no claim since the owner in this case has the money surrendered
%y 345 to enter into the %iddin# a#reement, since 345 did not accept the
contract within the 2 day period and the contract has %een %reachedC howeer the
the contractor is entitled to 7eep the deposit money.
D. :ould the Owner %e entitled to retain the tender deposit;
4es the owner would %e entitled to retain the deposit as it is clearly stated within
the contract a#reement the followin#
+The %idder #uarantees that if its tender is accepted %y the Owner and the Owner does not, for
any reason whatsoeer, receie the 1ontract si#ned %y the successful %idder within 2 days
after the successful %idder has %een represented with the 1ontract for si#nature, the Owner
may retain the tender deposit for its own use and may accept any other tender..

Therefore it is expected that all participants in the %iddin# process a%ide %y the
rules that they hae a#reed to enter into. An so the owner may 7eep the /2--,---
deposit.