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Legal Blog

Tender Calls

Posted on May 30, 2016 | Posted in Construction

For the past 31 years, owners have been doing their utmost to ensure that contractors are bound to their bids, but still allow themselves the power to decide which contractor to use regardless of the tender price or fairness. The owners have lost all Supreme Court of Canada decisions when contractors challenged their use of discretion. However, every time the Court rendered a decision, owners would revise their tender calls in a manner that attempted to bypass the decision.

Some owners have now thrown in the towel and have drafted tender clauses to remove the Contract A – Contract B concept and return to the state of law before Ron Engineering, which allowed a contractor to withdraw a bid at any time before it was accepted and allowed an owner to choose any contractor it wished. As long as the clause is bilateral, it should be acceptable to contractors. However, we expect that some greedy owners will still attempt to draft clauses that bind the contractor to its bid, regardless of mistakes, but still allow the owner to choose any bid, regardless of fairness or price.

Jonathan Speigel


Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.


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