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A call for tenders was sent out requiring a deposit of $150,000 which would be lost if the tendered offer was withdrawn. Ron Engineering submitted an offer along with the required deposit in the form of a certified cheque. The submitted tenders were opened by the owner and Ron Engineering was the low bidder by a substantial margin. It was then discovered that the price on the tender documents was far lower than the price that Ron Engineering had intended to submit, and that they had made a mistake in calculating their total bid price. They informed the owner of the mistake and tried to have the offer changed. The change was refused, the contract was given to another company, and the owner kept Ron Engineering's bid deposit. Ron Engineering sued to get their deposit back. The owner counter-claimed for costs incurred as a result of having to go with a different bidder. At trial the counter-claim was dismissed but it was held that the owner was entitled to keep the deposit. The Ontario Court of Appeal reversed the trial decision and held, relying on the contractual doctrine of mistake, that Ron Engineering was entitled to get its deposit back. The owner appealed to the Supreme Court of Canada.
#Is there a contract completed during the tendering process?
#Is there a contract completed during the tendering process?

Latest revision as of 00:29, March 4, 2020



  1. Is there a contract completed during the tendering process?
  2. When is this contract completed?
  3. What are the conditions of this contract?


Appeal allowed, owner to keep the deposit.


Generally, calls for tenders are invitations to treat. However, in cases like this where specific language and conditions are used then it becomes a unilateral offer. "Contract A" was accepted by the contractor when he submitted his bid in accordance with the terms, and it states that he has an obligation to enter into "Contract B" – the construction contract. Accepting Contract A binds the contractor to enter into Contract B. The deposit was to ensure the performance of the contractor of its obligations under Contract A, which it failed to live up to.


Bids at once become irrevocable if filed in conformity with the terms and conditions under which the call for tenders was made, if such terms so provide.

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