Case Study : Ron Engineering And Construction

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1. The Complainant’s Position [Ron Engineering &Construction (Eastern) Ltd.]  Due to a human mistake, Ron Engineering’s submitted tender was $750,058 lower than the next lower tender.  The contractor requested by telex to withdraw its tender without penalty even before going into execution agreement.  The contractor did not intend to “submit the tender in its form and substance.”  The error was obvious and can be proven as the owner forgot unintentionally to “insert the number of weeks specified by the tender in the appropriate blank.” The contractor asked to be given the opportunity to show to the court and to the owner his estimate.  This mistake makes the tender submitted by Ron Engineering non-compliant and should be rejected. …show more content…
4) The contractor’s employee asked for withdrawal after the document was filed. 5) The owner accuses the contractor’s employee to have known the error prior to the tender opening. 6) The complainant attempted diligently to find a way that would allow him to withdraw without being penalized, 7) The owner hired some consultants prior to calling for tendering, and the consultant’s estimations for the cost of the project including enough profit was not far from the “mistaken” figure of the complainant. 8) The owner called Ron Engineering to sign the execution agreement as he considered the submitted tender as an obligation for the tenderer to execute the project. 9) The offeree considered that the contractor should pay the penalty as it was a common practice and the principles should apply even with the existence of the provision binding the offeror to keep the offer open for acceptance for a given period. 10) The contractor, upon the breach of his obligations, he caused some damages to the owner and he should be exposed to forfeiture. 3. The Ruling, Rationale & Remedies a. The Ruling  Contract A / Contract B: Contract A or unilateral “tendering contract” – offer by Owner to many bidders to enter into Contract A and offer by tenderer to enter into bilateral Contract B - arises on submission of valid tender, with terms determined by tender documents:  The bid is irrevocable  Contract B

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