Santos, OBLICON
JARDINE DAVIES, INC. v. COURT OF APPEALS
Topic: Articles 1325-1326; Advertisements
DOCTRINE:
Art. 1325. Unless it appears otherwise, business advertisements of
things for sale are not definite offers, but mere invitations to make an
offer. (n)
Art. 1326. Advertisements for bidders are simply invitations to make
proposals, and the advertiser is not bound to accept the highest or
lowest bidder, unless the contrary appears. (n)
CASE AT BAR:
PUREFOODS cannot invoke articles 1325 and 1326 for they have
already awarded FEMSCO. Which can be seen in the actions of
FEMSCO when PUREFOODS awarded them the said contract. This
award was confirmed through a letter.
SHORT ANSWERS:
1. Where did the problem start: When PUREFOODS
unilaterally cancelled the awarded contract to FEMSCO and
then awarded it to Jardine Davies, INC.
2. Who was chasing who: Jardine and PUREFOODS were
chasing FEMSCO (they want to reverse the decision made
by the RTC and CA)
3. What is the contract: contract to supply generators to
PUREFOODS
FACTS:
Petitioner PURE FOODS CORPORATION (hereafter
PUREFOODS) decided to install two (2) 1500 KW
generators in its food processing plant in San Roque,
Marikina City.
a bidding for the supply and installation of the generators
was held. Several suppliers and dealers were invited to
attend a pre-bidding conference to discuss the conditions,
propose scheme and specifications that would best suit the
needs of PUREFOODS.
Out of the eight (8) prospective bidders who attended the
pre-bidding conference, only three (3) bidders, namely,
respondent FAR EAST MILLS SUPPLY CORPORATION
(hereafter FEMSCO), MONARK and ADVANCE POWER
submitted bid proposals and gave bid bonds equivalent to
5% of their respective bids, as required.
Thereafter, in a letter dated 12 December 1992
addressed to FEMSCO President Alfonso Po,
PUREFOODS confirmed the award of the contract to
FEMSCO
Immediately, FEMSCO submitted the required
performance bond in the amount of P1, 841,187.90 and
contractor's all-risk insurance policy in the amount of P6,
137,293.00 which PUREFOODS through its Vice President
Benedicto G. Tope acknowledged in a letter dated 18
December 1992.
Later, however, in a letter dated 22 December 1992,
PUREFOODS through its Senior Vice President Teodoro L.
Dimayuga unilaterally cancelled the award as "significant
factors were uncovered and brought to (their) attention which
dictate (the) cancellation and warrant a total review and re-
bid of (the) project."
Consequently, FEMSCO protested the cancellation of the
award and sought a meeting with PUREFOODS.
PUREFOODS then awarded the project and entered into a
contract with JARDINE NELL, a division of Jardine Davies,
Inc. (hereafter JARDINE), which incidentally was not one of
the bidders.1wphi1.nt
RTC ruled in favor of FEMSCO and ordered Jardine and
PUREFOODS to indemnify FEMSCO
The CA affirmed the decision of the RTC in toto
PUREFOODS claim that FEMSCO was not an acceptance
of the latter's bid proposal and award of the project but more
of a qualified acceptance constituting a counter-offer which
 Santos, OBLICON

required FEMSCO's express conforme. Since PUREFOODS

never received FEMSCO's conforme, PUREFOODS was
very well within reason to revoke its qualified acceptance or
counter-offer. Hence, no contract was perfected between
PUREFOODS and FEMSCO.

ISSUE: Whether or not there is a perfected contract in relation to

Articles 1325 and 1326

HELD:
No
PUREFOODS to FEMSCO constituted acceptance of
respondent FEMSCO's offer as contemplated by law, by way
of the letter of PUREFOODS to FEMSCO dated 12
December 1992
The tenor of the letter, i.e., "This will confirm that Pure Foods
has awarded to your firm (FEMSCO) the project," could not
be more categorical.
Respondent FEMCO's submission of the performance
bond and contractor's all-risk insurance was an implied
acceptance, if not a clear indication of its acquiescence to,
the "conditional counter-offer," which expressly stated that
the performance bond and the contractor's all-risk insurance
should be given upon the commencement of the contract.

PETITION WAS DENIED