Restricción calórica y la comunicación intercelular

In the normal course of events (and subject to certain criteria laid down in the EC Directives), there will be no problem if a tender is rejected. However, in the event that a tenderer has been required to do a substantial amount of preparatory work which is outside the scope of that which is normally required, the tenderer may be entitled to payment. In the case of William Lacey Ltd v. Davis 2 All ER it was held that there was no distinction between work done which was intended to be paid for under a contract erroneously believed to exist and work done which was intended to be paid for out of proceeds of a contract which both parties erroneously believed was about to be made. Such work was not done gra- tuitously and a reasonable price must be paid for it. The same principle was applied in Construction Co Ltd v. Kigass Ltd (1989)

The EC Directives provide that tenders may not be rejected because they appear to be too low, without allowing the tenderer to give an explanation.

In Fratelli Costanzo v. Comune di (Municipality of Milan) 3 CMLR 239, an unsuccessful tenderer commenced proceedings against the Municipality on the grounds that his tender had been rejected pursuant to the Municipality's formula which automatically rejected all tenders which were more than ten per cent lower than the average of all tenders. It was held that the tenderer had the right to seek enforcement of the Directive.

The Directives also forbid rejection on the grounds that the tender is based on equivalent alternative specifications which meet standards. In Commission of the European Communities v. Ireland 44 BLR 1, an Irish company complained that its tender was rejected because the Spanish products offered by the tenderer did not comply with Irish stan- dards specified in the tender documents. The Spanish products complied with standards and it was held that the contracting authority (Dundalk Urban District Council) had failed to comply with Article 3 0 of the Treaty of Rome by excluding products of equivalent standards. It should be

7 4 Construction Contract Claims

noted that this particular contract was excluded under the threshold provi- sions of the Public Works Directive, but it was not exempt from the general provisions of the Treaty of Rome for nondiscriminatory technical specifications.

Errors in tenders should not normally be cause for rejection. Where errors in the tender are discovered and dealt with in accordance with the relevant codes of practice, many potential problems can be avoided. In any event, if the employer discovers an error in the tender before acceptance, and the tender is accepted without adjustment, the contractor will not be bound by the error: University v. Construction Ltd

22 DLR (3d) 9 - High Court of Ontario.

Tenderers are often asked to keep their tenders open for acceptance for a specified period. This does not prevent the tenderer from withdrawing his tender at any time. Tenderers may be bound by their tenders if there is consideration. The amount of consideration may only be nominal. Alter- natively, a Bid Bond may be required by the employer. Once the employer has unconditionally accepted a tender within the time for acceptance of tenders (or within a reasonable time if there is no specified time) and pro- vided that the tender has not been withdrawn, there is a binding contract.

Post-tender negotiations often take place, particularly in the private sector. Public tenders are less likely to be subject to negotiation. Current EC law does not cover post-tender negotiations. However, the Council of Ministers have issued a statement on this matter:

'The Council and the commission state that in open or restrictive procedures all negotiations with candidates or tenderers on fundamental aspects of contracts, variations in which are likely to distort competition, and in particular on prices, shall be ruled out; however, discussions with candidates or may be held but only for the purposes of clarifying or supplementing the content of their tenders or the requirements of the contracting authorities and providing this does not involve discrimination.' Public Procurement Directives, conference paper by Robert 10 December 1990.

It is not unusual for acceptance to be conditional, usually by way of a letter of intent. Care should be taken by the employer when drafting a letter of intent. Equally, the contractor should carefully consider the terms of a letter of intent in order to understand fully to what extent he has been authorised to proceed and how payment for work done will be established. Matters to be addressed when drafting a letter of intent should include:

detailed instructions clearly describing the work which is to proceed, distinguishing between design, ordering, taking delivery and execution of work;

full compliance with the tender documents so far as they apply to matters for which authority to proceed has been given;

Tender and Acceptance 75 terms of payment to be made in respect of the matters for which author- ity to proceed has been given;

provision for termination of contractor's rights to proceed pursuant to the letter of intent and the employer's liability for payment in the event of termination;

provision for cancellation of orders placed pursuant to the letter of intent and the employer's option to pay cancellation charges or to take deliv- ery of goods ordered;

care of, and responsibility for, work and materials including insurance;

goods and materials to be vested in the employer;

provision to terminate the terms of the letter of intent in the event of award of the contract and provisions to credit payments made under the letter of intent against certificates issued under the contract;

provision for settling disputes (usually retaining the same provisions as the proposed contract).

It is important that the letter of intent should make it clear that it is not an acceptance of the contractor's tender. It should, however, also make it clear that the employer has the option to accept the contractor's tender.

Even the most carefully prepared letter of intent may have its problems.

In British Steel Corporation v. Cleveland Bridge Engineering Co Ltd (1981) 24 94, the courts had to consider whether, or not, a contract had been created by a letter of intent. It was considered that each case must depend on the particular circumstances. However, it was decided that if a party acted on a request in a letter of intent and was simply claiming payment, it did not matter if a contract was not created as payment could be based on quantum meruit.

In C.J. Sims Ltd v. Shaftesbuy

QBD;

court had to consider the payment terms of a letter of intent. The terms provided for reimbursement of reasonable costs, including loss of profit and contribution of overheads, 'all of which must be substantiated in full to the reasonable satisfaction of our quantity surveyor'.

At first glance it would appear that the above terms were reasonable commercial requirements for payment. The employer successfully argued that it was a condition precedent to any payment being made to the con- tractor that the costs should be substantiated in full and to the satisfac- tion of the quantity surveyor. The judge was not disposed to the view that the contractor should be paid something on account pending full substan- tiation (which, with respect, is what would normally be expected).

A potential disaster area exists when contracts proceed on the basis of protracted correspondence and exchanges of letters, all of which contain elements of change to previous documents and there is no clear definition of the terms agreed between the parties. In Ltd v. E. Turner

76 Construction Contract Claims

Sons Ltd 2 3 the contract was intended to be

Exchanges of correspondence and an addendum bill of quantities dealt with phased handover. The works proceeded but the contract was never signed.

Disputes arose over phased completion dates and liquidated damages. The court had to consider when and how the contract was made. In doing so it came to the conclusion that both parties had agreed to phased comple- tion. As no contract had been signed the contractor could not rely on the words in clause of which prohibited modification to the stan- dard printed form in the contract bills. (It should be noted that in M.J.

(Contractors) Ltd v. London Borough of Hillingdon

EG provisions for phased completion were contained in the contract bills. The provisions were held to be ineffective on the grounds that the contract stipulated that nothing contained in the contract bills should over- ride or modify in any way the contract conditions.) The effect of the pro- visions in the post forms of contract regarding precedence of the contract conditions over the contract bills may be quite different (see Barry D Trentham Ltd v. in 2.7, supra).

It is not uncommon to agree to change the conditions, or specification or details, in the tender documents, prior to signing the contract. Failure to amend the contract documents to reflect the change may mean that the change, when made, is a variation to the contract despite the fact that the parties had agreed to the change prior to signing the contract. In H. Fair- weather & Co Ltd v. London Borough of Wandsworth 3 9 BLR the contract was signed after both parties had agreed that the speci- fied Clifton bricks would not be used and that bricks would be substituted therefor. There was delay in delivery of bricks. The contractor claimed that the delay arose out of a variation and claimed an extension of time under clause and loss and expense under clause of The architect granted an extension of time under clause for unforeseen shortages of materials, and refused a claim for loss and expense. It was held that the substitution was a variation.

In view of the above, it is essential that all agreed changes to the tender documents should be reflected in the contract to be signed by the parties.

Any agreed change which would otherwise constitute a variation should be reflected in revised contract bills. If any change affects the completion dates previously mentioned in the tender documents, the appropriate adjustment should be made in the contract documents prior to signature. If necessary, the tender (or contract) programme should be revised.

Finally, with the exception of essential key dates, it may be fatal to incor- porate the contractor's programme as a contract document. Acceptance of a tender may be on the basis of the contractor's programme, but its use as a contract document can cause considerable problems. This aspect will be dealt with in Chapter 4.

Monitoring Delay and