Topic 4 - Example Short Answer Question

Which one is a correct statement of the law regarding a unilateral contract (a typical example of which is one under which the offeror undertakes certain obligations if the offeree acts as requested)?

• The completion of the act requested in an offer to enter into a unilateral contract is the acceptance of the offer, and acceptance must be communicated to the offeror in order to be effective. Therefore, before the offeree starts to perform the act and after the offeree has completed the act, the offeree must notify the offeror of the start and completion. Otherwise, there would be no unilateral contract.

• (a)        While the offeree’s complete performance of the act is effective acceptance of the offer to enter into a unilateral contract, some courts have remarked that the offeror is not allowed to withdraw their offer once the offeree has started to perform the act but has not completed the act yet.

• A unilateral contract is one that really has only one party to the contract. That is in contrast to a bilateral contract that has two parties to it.

• If an offer to enter into a unilateral contract is made to B, B may validly accept the offer by telling the offeror “I accept your offer, and will do as requested” or using other words to the same effect.

Utopia City Council places an ad in the local newspaper calling for tenders to mow the grass in the parks and other public areas for which the Council is responsible.  The ad refers the readers to a website for the terms and conditions of the contract to be awarded, and says: “We invite you to submit a tender regarding the above job.  Every tender must be (a) received by us no later than 5 pm Monday, 5 March 2012; (b) accompanied by a cheque of $200 payable to Utopia City Council, the money being non-refundable whether your tender is successful or not; and (c) accompanied by the audited financial statements of your company in the last two years.”  The last requirement is put there because the previous contractor has been liquidated and is unable to continue the job, which forces the Council to call for the tenders.  The ad states that “all conforming tenders will be considered fairly and in good faith”, but also contains a privilege clause of the common type, namely “lowest tender or any tender not necessarily accepted”.  Discuss whether the following companies respectively have a claim against the Council. 

[Note: if there is a contract and one party is in breach of the contract, the other party will have a claim against the first party.  If there is no contract, (or if there is one and the party is not in breach of contract) the other party will have no claim.  The above is enough for our purposes.  It goes without saying that, at this stage of the course, you are not required to quantify the claim, if any.]

 

(Question a) A Ltd submitted a tender before the deadline with the cheque.  However, it did not enclose the audited financial statements with the tender.  The cover letter explained: “as regards the financial statements, we do not think that it is appropriate for you to require and have access to such commercially sensitive information.  But we can assure you that our company is financially capable of fulfilling the contract if it is awarded to us.”  Council staff marked the tender as “incomplete” and returned the tender to A Ltd without giving it any (further) thought.

Utopia City Council places an ad in the local newspaper calling for tenders to mow the grass in the parks and other public areas for which the Council is responsible.  The ad refers the readers to a website for the terms and conditions of the contract to be awarded, and says: “We invite you to submit a tender regarding the above job.  Every tender must be (a) received by us no later than 5 pm Monday, 5 March 2012; (b) accompanied by a cheque of $200 payable to Utopia City Council, the money being non-refundable whether your tender is successful or not; and (c) accompanied by the audited financial statements of your company in the last two years.”  The last requirement is put there because the previous contractor has been liquidated and is unable to continue the job, which forces the Council to call for the tenders.  The ad states that “all conforming tenders will be considered fairly and in good faith”, but also contains a privilege clause of the common type, namely “lowest tender or any tender not necessarily accepted”.  Discuss whether the following companies respectively have a claim against the Council. 

[Note: if there is a contract and one party is in breach of the contract, the other party will have a claim against the first party.  If there is no contract, (or if there is one and the party is not in breach of contract) the other party will have no claim.  The above is enough for our purposes.  It goes without saying that, at this stage of the course, you are not required to quantify the claim, if any.]

(Question b) B Ltd left everything to the last minute.  It got its tender ready at 3:30 pm, 5 March.  It used the service of a courier company that boasted “Everything delivered in the Greater Utopia area within an hour.”  In the rush to deliver, the driver of the courier company crashed the van into a taxi.  The two drivers had a huge row and police were called to solve the dispute.  As a result, B Ltd’s tender was delivered to the Council at 5:02 pm.  The receptionist marked the tender as “late” without even opening the envelope.  The courier driver took the tender back to B Ltd.

Utopia City Council places an ad in the local newspaper calling for tenders to mow the grass in the parks and other public areas for which the Council is responsible.  The ad refers the readers to a website for the terms and conditions of the contract to be awarded, and says: “We invite you to submit a tender regarding the above job.  Every tender must be (a) received by us no later than 5 pm Monday, 5 March 2012; (b) accompanied by a cheque of $200 payable to Utopia City Council, the money being non-refundable whether your tender is successful or not; and (c) accompanied by the audited financial statements of your company in the last two years.”  The last requirement is put there because the previous contractor has been liquidated and is unable to continue the job, which forces the Council to call for the tenders.  The ad states that “all conforming tenders will be considered fairly and in good faith”, but also contains a privilege clause of the common type, namely “lowest tender or any tender not necessarily accepted”.  Discuss whether the following companies respectively have a claim against the Council. 

[Note: if there is a contract and one party is in breach of the contract, the other party will have a claim against the first party.  If there is no contract, (or if there is one and the party is not in breach of contract) the other party will have no claim.  The above is enough for our purposes.  It goes without saying that, at this stage of the course, you are not required to quantify the claim, if any.]

(Question c) C Ltd’s tender, at $200,000, was the lowest among the tenders considered by the Mayor (on behalf of the Council).  The tender was rejected and the reason was recorded as “cannot be seen to yield to trouble-makers”.  In the past, C Ltd publicly accused the Mayor of cronyism in the form of awarding council jobs and projects to his cronies and political backers. 

Utopia City Council places an ad in the local newspaper calling for tenders to mow the grass in the parks and other public areas for which the Council is responsible.  The ad refers the readers to a website for the terms and conditions of the contract to be awarded, and says: “We invite you to submit a tender regarding the above job.  Every tender must be (a) received by us no later than 5 pm Monday, 5 March 2012; (b) accompanied by a cheque of $200 payable to Utopia City Council, the money being non-refundable whether your tender is successful or not; and (c) accompanied by the audited financial statements of your company in the last two years.”  The last requirement is put there because the previous contractor has been liquidated and is unable to continue the job, which forces the Council to call for the tenders.  The ad states that “all conforming tenders will be considered fairly and in good faith”, but also contains a privilege clause of the common type, namely “lowest tender or any tender not necessarily accepted”.  Discuss whether the following companies respectively have a claim against the Council. 

[Note: if there is a contract and one party is in breach of the contract, the other party will have a claim against the first party.  If there is no contract, (or if there is one and the party is not in breach of contract) the other party will have no claim.  The above is enough for our purposes.  It goes without saying that, at this stage of the course, you are not required to quantify the claim, if any.]

(Question d) D Ltd’s tender, at $300,000, was the second-lowest among the tenders considered by the Mayor (on behalf of the Council).  The tender was rejected and the reason was recorded as “price too high; way beyond Council’s budget”. 

Utopia City Council places an ad in the local newspaper calling for tenders to mow the grass in the parks and other public areas for which the Council is responsible.  The ad refers the readers to a website for the terms and conditions of the contract to be awarded, and says: “We invite you to submit a tender regarding the above job.  Every tender must be (a) received by us no later than 5 pm Monday, 5 March 2012; (b) accompanied by a cheque of $200 payable to Utopia City Council, the money being non-refundable whether your tender is successful or not; and (c) accompanied by the audited financial statements of your company in the last two years.”  The last requirement is put there because the previous contractor has been liquidated and is unable to continue the job, which forces the Council to call for the tenders.  The ad states that “all conforming tenders will be considered fairly and in good faith”, but also contains a privilege clause of the common type, namely “lowest tender or any tender not necessarily accepted”.  Discuss whether the following companies respectively have a claim against the Council. 

[Note: if there is a contract and one party is in breach of the contract, the other party will have a claim against the first party.  If there is no contract, (or if there is one and the party is not in breach of contract) the other party will have no claim.  The above is enough for our purposes.  It goes without saying that, at this stage of the course, you are not required to quantify the claim, if any.]

(Question e) Would your answers be different if the ad does not say “all conforming tenders will be considered fairly and in good faith”?