International Construction Law Review
TENDERING PROCEDURE AT COMMON LAW
PROFESSOR R H CHRISTIE
QC, MA, LLB (Cantab), FCIArb, FAArb University of Cape Town
Introduction
Almost all international construction contracts come into existence as a result of a tendering process, and in the Commonwealth the process tends to be subject to legislation binding on public authorities. In concentrating on complying with the legislative requirements it is too easy to forget that the tendering process is also governed by the common law, and that the common law is binding on all entities putting contracts out to tender, whether or not they are public authorities.
This article does not deal with the legislation, but traces the development of the common law tendering rules, in which, as will be seen, the Canadian courts have taken the lead. Frequent reference will be made to two publications which, although not intended as statements of the common law, may profitably be taken as statements of best practice consistent with the common law. They are the FIDIC handbook, Tendering Procedure (2nd ed., 1994), and the UNCITRAL Model Law on Procurement of Goods, Construction and Services which is published by the United Nations Commission on International Trade Law and is designed to have legislative force in those countries that have adopted it.1
The common law rules hinge on the concept of a tender contract preceding the award of the construction contract. The overwhelming majority of cases in which this concept has been developed and applied have been disputes involving a public authority as prospective employer, but the judges have consistently used the language of contract and not administrative law and have enforced a tender contract in a few cases in the private sector.
The tender contract
It is a mistake to think simplistically that because an invitation to tender is no more than an invitation to submit offers, therefore there can be no contractual relationship between the prospective employer and tenderers.
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