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The unsuccessful tenderer – legal rights and remedies

by David Levin

David Levin QC (2010) 26.5 BCL 324

Major construction contracts are usually preceded by an invitation to tender and a tender offer. In some situations the invitation may amount to nothing more than an invitation to treat. However, the tenderer often makes a major commitment by investing time and resources in providing a tender offer in accordance with the invitation and frequently by paying a tender deposit.

The relationship between the invitor issuing the invitation and the tenderers responding to it may be a contractual one with rights for each party and remedies for breach. Invitors frequently attempt to exclude liability for breach. If the tender is unsuccessful the disgruntled tenderer may want to recoup its lost expenditure, or claim damages for loss of a chance to obtain the contract from the invitor or the successful tenderer.

Recent cases in Australia and overseas (particularly Canada) have examined the tender situation in some detail and will repay closer examination.

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