Contract A
Encyclopedia
In Canadian contract law
, Contract A is a concept that has recently been applied by courts regarding the fair and equal treatment of bidders in a contract tendering process. Essentially this concept formalizes previously applied precedents and strengthens the protection afforded to those who submit bids in the tendering process. The concept was introduced in 1981 by the Supreme Court of Canada
, in R. v. Ron Engineering and Construction (Eastern) Ltd
. The court found that a "duty of fairness" was owed to all bidders by an owner in a tendering process.
The Contract A is formed when a "request for proposal" is responded to in the form of a valid bid, sometimes also known as submission of price. As many Contracts A are formed between the owner (person, company or organization tendering the project) and the bidders as there are bids received. The owner must now deal fairly and equally with all bidders, and must not show any favoritism or prejudice
towards any bidder(s). In essence, this concept boils down to the right of an individual to have equal opportunity to be successful with their bid for work.
A breach of Contract A may occur if the owner (or an owner's officer or representative, see vicarious liability
), provides information, changes specification during the tendering process to unfairly benefit a particular bidder, enters into closed negotiations with an individual bidder in an effort to obtain more desirable contract conditions, etc. The most common situation in which an owner is accused of having breached Contract A occurs when a bidder is selected who is not the lowest bidder. This contravenes established custom and practice, which would normally dictate that the lowest bid be awarded the contract, but is not normally a source of a breach if handled properly. The successful suits for breach typically occur if the lowest bidder has been excluded based on a stipulation not clearly outlined in the tender documents (such as preference for local bidders) or when the Privilege Clause employed by the owner to exclude a principle of custom and practice is judged by the courts to be too broadly worded to have any meaning.
Canadian contract law
Canadian contract law has its foundation in the English legal tradition of the 19th and early 20th century. It remains largely rooted in the old English common law and equity. Individual provinces have codified many of the principles in a Sale of Goods Act, which was also modeled on early English...
, Contract A is a concept that has recently been applied by courts regarding the fair and equal treatment of bidders in a contract tendering process. Essentially this concept formalizes previously applied precedents and strengthens the protection afforded to those who submit bids in the tendering process. The concept was introduced in 1981 by the Supreme Court of Canada
Supreme Court of Canada
The Supreme Court of Canada is the highest court of Canada and is the final court of appeals in the Canadian justice system. The court grants permission to between 40 and 75 litigants each year to appeal decisions rendered by provincial, territorial and federal appellate courts, and its decisions...
, in R. v. Ron Engineering and Construction (Eastern) Ltd
R. v. Ron Engineering and Construction (Eastern) Ltd
R. v Ron Engineering and Construction Ltd., [1979] 24 OR 332 , revd [1981] 1 SCR 111, 119 DLR 267, is the leading Supreme Court of Canada decision on the law of tendering for contracts. The case concerned the issue of whether the acceptance of a call for tenders for a construction job could...
. The court found that a "duty of fairness" was owed to all bidders by an owner in a tendering process.
The Contract A is formed when a "request for proposal" is responded to in the form of a valid bid, sometimes also known as submission of price. As many Contracts A are formed between the owner (person, company or organization tendering the project) and the bidders as there are bids received. The owner must now deal fairly and equally with all bidders, and must not show any favoritism or prejudice
Prejudice
Prejudice is making a judgment or assumption about someone or something before having enough knowledge to be able to do so with guaranteed accuracy, or "judging a book by its cover"...
towards any bidder(s). In essence, this concept boils down to the right of an individual to have equal opportunity to be successful with their bid for work.
A breach of Contract A may occur if the owner (or an owner's officer or representative, see vicarious liability
Vicarious liability
Vicarious liability is a form of strict, secondary liability that arises under the common law doctrine of agency – respondeat superior – the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the "right, ability...
), provides information, changes specification during the tendering process to unfairly benefit a particular bidder, enters into closed negotiations with an individual bidder in an effort to obtain more desirable contract conditions, etc. The most common situation in which an owner is accused of having breached Contract A occurs when a bidder is selected who is not the lowest bidder. This contravenes established custom and practice, which would normally dictate that the lowest bid be awarded the contract, but is not normally a source of a breach if handled properly. The successful suits for breach typically occur if the lowest bidder has been excluded based on a stipulation not clearly outlined in the tender documents (such as preference for local bidders) or when the Privilege Clause employed by the owner to exclude a principle of custom and practice is judged by the courts to be too broadly worded to have any meaning.
See also
- Call for bids
- Contract BContract BA Contract B is formed when an Owner formally accepts a Bid or, colloquially, a submission of price. Only a single Contract B is formed between the Owner and the successful bidder. Tied to the concept of Contract A, Contract B is a place holder in the concept, a marker at the end of a formalized...
- Duty of fairness
- Request for ProposalRequest for ProposalA request for proposal is issued at an early stage in a procurement process, where an invitation is presented for suppliers, often through a bidding process, to submit a proposal on a specific commodity or service. The RFP process brings structure to the procurement decision and is meant to...
- Reverse auctionReverse auctionA reverse auction is a type of auction in which the roles of buyers and sellers are reversed. In an ordinary auction , buyers compete to obtain a good or service, and the price typically increases over time...
External links
- Drafting RFPs in Canada - Legal aspects of drafting RFPs, RFQs and ITTs