While browsing my notes for Contract Law, I found something really an important. That is wrt to the classification of acceptance of tender as a contract. Invitation to tender is usually but invariably an invitation to treat. Where this is the case, the tender constitutes an offer, however the acceptance of a tender does not always results in a binding contract. If the invitation of tenders does not specify the quantity of goods in such quantity as maybe ordered from time to time, or "as and where required", then acceptance of the tender does not at that stage conclude a contract. Any tender submitted is a 'standing offer' which is only accepted in the legal sense when an order is placed for a quantity of goods and there will result a binding contract confined to that quantity. The standing offer may be revoked at anytime although the tenderer will be bound by orders already made. This drives me to think about the type of contract I had in my daily operations. We have this type of unit-rate contracts where the utilization is being made on call-off basis. Call of here means exactly as and when required. When there is no utilization, there will be no 'work-order' awarded. As the prevailing case 'Percival Ltd v LCC Asylums Committee, 1918' as follows.
A firm of contractors signed a tender addressed to the Asylums Committee of the London County Council whereby they agreed on the acceptance of the tender to supply all or any of the goods named in the schedule if and to the extent the same should be ordered by the committee, and in any quantity. It was also provided that the quantities stated in the schedule were those which were estimated as the probable requirements for the period of the contract, but the committee might at their option require the supply and delivery under any item in the schedule of goods in excess of the quantity specified in such item, and the goods were to be delivered at the asylums in such quantities at such time and in such manner as the committee or the steward might order from time to time. The committee did not order the amounts specified in the schedule to the tender form, and the contractors claimed that they were entitled to supply goods to the full amount therein specified: Held on the true construction of the contract contained in the document of tender, the Asylums Committee were under no obligation to order any of the goods, but that the firm of contractors were bound to deliver the goods specified as and when they obtained orders for them from the committee.
It sometimes happens that the effect of the form of the tender with an acceptance is to make a firm contract by which the purchasing body undertakes to buy all the specified material from the contractor. On the other hand, one knows that these tenders are very often in a form under which the purchasing body is not bound to give the tenderer any order at all; in other words, the contractor offers to supply goods at a price, and if the purchasing body chooses to give him an order for goods during the stipulated time, then he is under an obligation to supply the goods in accordance with the order; but apart from that nobody is bound. There is also an intermediate contract that can be made in which, although the parties are not bound to any specified quantity, yet they bind themselves to buy and to pay for all the goods that are in fact needed by them. Of course, if there is a contract such as that, then there is a binding contract which will be broken if the purchasing body in fact do need some of the articles the subject of the tender, and do not take them from the tenderer (Atkin, J).
It sometimes happens that the effect of the form of the tender with an acceptance is to make a firm contract by which the purchasing body undertakes to buy all the specified material from the contractor. On the other hand, one knows that these tenders are very often in a form under which the purchasing body is not bound to give the tenderer any order at all; in other words, the contractor offers to supply goods at a price, and if the purchasing body chooses to give him an order for goods during the stipulated time, then he is under an obligation to supply the goods in accordance with the order; but apart from that nobody is bound. There is also an intermediate contract that can be made in which, although the parties are not bound to any specified quantity, yet they bind themselves to buy and to pay for all the goods that are in fact needed by them. Of course, if there is a contract such as that, then there is a binding contract which will be broken if the purchasing body in fact do need some of the articles the subject of the tender, and do not take them from the tenderer (Atkin, J).
