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M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619

Facts:

D invited for tenders. D accepted S’s tender. In tender document said lump-sum. S had written note that specified diff prices. P says that invalidated tender. D relies on privilege clause – lowest bid doesn’t have to be accepted. P says contract was non-compliant

Ratio:

In the tender process there are two contracts – ‘A’ when the tenders are submitted for consideration. The person asking for the tenders does not have to accept the lowest bid, but does have an obligation to not accept a non-compliant bid. ‘B’ is created when one of the tenders in accepted (the contract to do the work).

Analysis:

Terms are to be examined on the terms and conditions of the tender call. – this means that Contract A may not always be formed in the tenure process (if explicitly says it is not an offer).
**Look at intention of offeror
**Also look at: Whether Contract A arose depends on whether the parties intended to initiate contractual relations by the submission of a bid in response to the invitation to tender.

D was in breach to everyone who submitted a compliant tenure by accepting non-compliant tenure
**Damages are awarded based on actual loss (who would have got bid)

Holding:

D breached the obligation to the tenders by accepting a non-compliant bid


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