Tendering and Negotiating Contracts

Notes


1 See ch 3, para 3.4 for discussion of the functional specification.


2 Tender bid as offer: Spencer v Harding (1870) LR 5 CP 561; Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195, [1990] 3 All ER 25. Offer can be withdrawn at any time before it is accepted: Payne v Cave (1789) 100 ER 502, 3 TR 148; Tuck and Anor v Bake’r [1990] 2 EGLR 195; Bircham & Co Nominees (2) Ltd and Anor v Worrett Holdings Ltd [2001] EWCA Civ 775, [2001] 3 EGLR 83.


3 For a detailed discussion of the requirements of offer and acceptance see H G Beale Chitty on Contracts (32nd edn, Sweet & Maxwell 2015) ch 2.


4 What is a penalty clause? See Cavendish Square Holding BV v Talal El Makdessi [2015] UKSC 67.


5 See para 16.43 of ch 16 on performance bonds.


6 Compania Naviera Micro SA v Shipley International Inc (The Parouth) [1982] 2 Lloyd’s Rep 351, Dornoch Ltd v Mauritius Union Assurance Co Ltd [2006] EWCA Civ 389, [2006] 2 Lloyd’s Rep 475. Further discussion can be found in ch 30 of Chitty on Contracts (n 3).


7 See Chitty on Contracts (n 3) ch 2 for a detailed explanation.


8 Air Transworld Ltd v Bombardier Inc [2012] EWHC 243 (Comm), [2012] 1 Lloyd’s Rep 349 at para 75; Glencore Energy UK Ltd v Cirrus Oil Services Ltd [2014] EWHC 87 (Comm), [2014] 1 All ER 513.


9 Thomas v Thomas (1842) 2 QB 851, 859, 114 ER 330; Hill v Haines [2007] EWCA Civ 1284, [2008] 2 All ER 901 at para 79.


10 For further discussion see Chitty on Contracts (n 3) ch 4.


11 Thoresen Car Ferries Ltd v Weymouth Portland BC [1977] 2 Lloyd’s Rep 614; Air Studio (Lyndhurst) Ltd v Lombard North Central plc [2012] EWHC 3162 (QB), [2013] 1 Lloyd’s Rep 63 at para 5.


12 Statement from Chitty on Contracts (n 3) approved in Schweppe v Harper [2008] EWCA Civ 442 (Dyson LJ) at para 65, [2008] All ER (D) 311.


13 Rossdale v Denny [1921] 1 Ch 57, 38 TLR 445; Ronald Preston & Partners v Markheath Securities [1988] 2 EGLR 23, (1988) 31 EG 57; Air Studio (Lyndhurst) Ltd v Lombard North Central plc [2012] EWHC 3162 (QB), [2013] 1 Lloyd’s Rep 63; RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG (UK Production) [2010] UKSC 14, [2010] 1 WLR 753 at para 48.


14 Star Steamship Society v Beogradska Plovidba (The Junior K) [1988] 2 Lloyd’s Rep 583; CPC Consolidated Pool Carriers GmbH v CTM CIA Transmediterreanea SA (The CPC Gallia) [1994] 1 Lloyd’s Rep 68; Thoresen & Co (Bangkok) Ltd v Fathom Marine Company Ltd [2004] EWHC 167 (Comm), [2004] 1 Lloyd’s Rep 622.


15 Varverakis v Compagnia de Navegacion Artico SA (The Merak) [1976] 2 Lloyd’s Rep 250; Ee v Kakar (1979) 40 P & CR 223, [1980] 2 EGLR 137.


16 Ee v Kakar (n 15).


17 Ee v Kakar (n 15); Brauer & Co (Great Britain) Ltd v Clark (James)(Brush Materials) Ltd [1952] 2 All ER 497, [1952] 2 Lloyd’s Rep 147. See discussion of conditional agreements in Chitty on Contracts (n 3) paras 2–156 to 2–166 and 4–012.


18 Mackay v Dick & Stevenson (1881)6 App Cas 251, 263, Swallowfalls Ltd v Monaco Yachting & Technologies SAM [2014] EWCA Civ 186, [2014] 2 Lloyd’s Rep 50 at paras 32 and 33.


19 Ee v Kakar (n 15).


20 Smallman v Smallman [1972] Fam 25, [1971] 3 WLR 588.


21 Lee-Parker v Izzet (No 2) [1972] 1 WLR 775, [1972] 2 All ER 800. Compared to Janmohamed v Hassam [1977] 1 EGLR 142, (1976) 241 EG 609.


22 Kim Lewison The Interpretation of Contracts (5th edn, Sweet & Maxwell 2011) para 16.05.


23 For example Meehan v Jones (1982) 149 CLR 571, [1982] HCA 52.


24 As discussed in para 2.25 above.


25 Hargreaves Transport Ltd v Lynch [1969] 1 WLR 215, [1969] 1 All ER 455; Richard West & Partners (Inverness) Ltd v Dick [1969] 2 Ch 424, [1969] 1 All ER 943. The prima facie assumption that the duty is to use all reasonable efforts and is not absolute can be displaced by express words to the contrary. See Peter Cassidy Seed Co Ltd v Osuustukkukauppa IL [1957] 1 WLR 273, [1957] 1 Lloyd’s Rep 25.


26 See the cases referred to in n 25 above. A reasonable endeavours obligation is less stringent than the obligation to use best endeavours. What a reasonable endeavours obligation entails varies with the context in which it is used. See Rhodia International Holdings Ltd and Anor v Huntsman International LLC [2011] EWHC 292 (Comm), [2007] 2 Lloyd’s Rep 325.


27 The precise operation of the obligations in a particular contract depends on the interpretation of that contract.


28 FEED stands for front end engineering design. See ch 3 for an explanation.


29 For example, by making the LOI ‘subject to contract’ or clearly expressing that the document is not intended to create legal relations.


30 The letter can be worded to make clear that the parties only intend the law and jurisdiction clause to be enforceable.


31 As is usually the case with ‘letters of comfort’. See Associated British Ports v Ferryways NV [2009] EWCA Civ 189, [2009] 1 Lloyd’s Rep 595; Kleinwort Benson Ltd v Malaysian Mining Corp [1989] 1 All ER 785; cf Diamond Build Ltd v Clapham Park Homes Ltd [2008] EWHC 1439 (TCC), 119 Con LR 32.


32 As discussed above at paras 2.9 and 2.10.


33 Associated British Ports v Ferryways (n 31).


34 See discussion in ch 4.


35 Associated British Ports v Ferryways (n 31).


36 Courtney & Fairbairn Ltd v Tolaini Bros (Hotels) Ltd [1975] 1 WLR 297 at 301, [1975] 1 All ER 716; Covington Marine Corp v Xiamen Shipbuilding Co Ltd [2005] EWHC 2912 (Comm), [2006] 1 Lloyd’s Rep 745 at para 52.


37 Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The Scaptrade) [1981] 2 Lloyd’s Rep 425, affirmed in [1983] 2 AC 694; The Junior K (n 14).


38 Pagnan SpA v Granaria BV [1985] 2 Lloyd’s Rep 256 at 270, affirmed [1986] 2 Lloyd’s Rep 547.


39 Walford v Miles [1992] 2 AC 128, [1992] 1 All ER 453.


40 Mummery LJ at para 4 of Cobbe v Yeoman’s Row Management Ltd [2006] EWCA Civ 1139, [2006] 1 WLR 2964 (CA), [2008] UKHL 55, [2008] 1 WLR 1752 (HL).


41 Chelsfield Advisers LLP v Qatari Diar Real Estate Investment Co [2015] EWHC 1322 (Ch) at para 80.


42 Cobbe v Yeoman’s Row Management Ltd (n 40). Walford v Miles (n 39).


43 [2015] EWHC 226 (QB).


44 [2013] EWHC 111 (QB).


45 Braganza v BP Shipping Ltd [2015] UKSC 17, [2015] 1 WLR 1661; Fondazione Enasarco v Lehman Brothers Finance SA Anthracite Rated Investments (Cayman) Ltd [2015] EWHC 1307 (Ch).


46 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, [1947] 2 All ER 680.


47 Even if there was no express agreement, the Company will usually be obliged to pay the Contractor under the law of restitution. Otherwise the Company will have been unjustly enriched. For example, see Whittle Movers v Hollywood Express [2009] EWCA Civ 819.


48 As discussed in paras 9.36 to paras 9.41 of ch 9.


49 In certain circumstances, the court will imply a term that certain contract clauses will have retrospective effect: see Trollope & Colls Ltd v Atlantic Power Construction Ltd [1963] 1 WLR 333, [1962] 3 All ER 1035.


50 This is distinct from backdating the execution of the contract, which under English law, may be a fraudulent activity.


51 Holmes v Alfred McAlpine Homes (Yorks) [2006] EWHC 110, [2006] All ER 68.


52 Re Fulham Borough Council v National Electric Construction Co Ltd (1905) 74 JP 55.


53 Wimhurst v Deeley (1845) 2 CB 253, 135 ER 942; Royston Urban District Council v Royston Builders Ltd (1961) 177 EG 589.


54 Modern Building Wales Ltd v Limmer & Trinidad Co Ltd [1975] 1 WLR 1281, [1975] 2 Lloyd’s Rep 318. Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696, [1956] 3 WLR 37.


55 The parol evidence rule: Goss v Lord Nugent (1833) 5 B & Ad 58 at 64, 110 ER 713.


56 City of Westminster Properties (1934) Ltd v Mudd [1959] Ch 129, [1958] 2 All ER 733.


57 If appropriately drafted. See BSkyB Ltd v HP Enterprise Services UK Ltd and Anor [2010] EWHC 86 (TCC) at paras 372 to 386, (2010) 129 Con LR 147.


58 Inntrepreneur Pub Co (GL) v East Crown [2000] 2 Lloyd’s Rep 611, [2000] 3 EGLR 31; Exxonmobil Sales and Supply Corporation v Texaco Ltd [2003] EWHC 1964 (Comm), [2003] 2 Lloyd’s Rep 686.


59 An outline of the principles is set out below but further discussion can be found in ch 3 of Chitty on Contracts (n 3).


60 Agip SpA v Navigazione Alta Italia SpA (The Nai Genova and the Nai Superba) [1984] 1 Lloyd’s Rep 353, 359.


61 KPMG LLP v Network Rail Infrastructure Ltd [2006] EWHC 67 (Ch), [2006] All ER (D) 247.


62 Lord Hoffmann referred to the succinct summary of the principles by Peter Gibson LJ in Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, [2002] 2 EGLR 71 at 74, para 33. See also the discussion in paras 3–058 to 3–068 of Chitty on Contracts (n 3).


63 Thomas Bates Son v Wyndhams Ltd [1981] 1 WLR 505, [1981] 1 All ER 1077.


64 Tucker v Bennett (1887) 38 Ch D 1; Ernest Scragg & Sons Ltd v Perseverance Banking and Trust Co Ltd [1973] 2 Lloyd’s Rep 101; Re Walton’s Settlement [1922] 2 Ch 509, [1922] All ER 439; Fowler v Fowler [1859] ER 598, (1859) 45 ER 97, (1859) De G & J 250.


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