Legal Blog

Tender Words

When determining whether an owner breached its duty to award a contract in accordance with tendering principles, the court always looks at the documents in the call for tenders. It certainly did so in Todd Bros Contracting Ltd. v. Algonquin Islands (Township), a 2015 decision of the Ontario Court of Appeal.

The tender documents required a bidder to sign a waiver of damages if the Township could not proceed with an airport project as a result of “any other public issues/concerns or the withdrawal of funding from applicable sources.” As it happened, the airport project was a hot political item, a new council was elected and the new councillors, many of whom had campaigned against the project, voted to defer compliance with a conditional environmental approval until the Township conducted a further project review. The Ministry of Natural Resources then suggested a different project, which ultimately took place.

The Court stated that if the Township had refused to agree to the different project, it could have lost provincial funding for the original project. That, and the fact that the project was a hot political item, was sufficient for the Township to refuse to award the original project to the contractor and for the waiver of damages to take effect.

Image courtesy of dharder.

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