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Blackpool & Fylde Aero Club Ltd v Blackpool BC [1990] 3 ALL ER 25

By Oxbridge Law TeamUpdated 04/01/2024 06:59

Judgement for the case Blackpool & Fylde Aero Club Ltd v Blackpool BC

KEY POINTS

  • The Council's invitation to tender was, to a limited extent, an offer, and the Club's submission of a timely and conforming tender constituted acceptance. Thus, a contractual relationship existed, entitling the Club to have its tender considered alongside others.

  • In a tendering process, the invitation to tender is the unilateral offer made by the party seeking bids. Acceptance occurs when a bidder submits a compliant and timely bid as per the terms specified in the invitation.

FACTS

  • Blackpool Borough Council managed Blackpool Airport and granted a licence to a single company, Blackpool & Fylde Aero Club, to operate pleasure flights since 197. In 1983, as the licence was expiring, the Council invited tenders from seven organisations, including the Aero Club, for a new licence to operate both light and heavy aircraft from the airport, with a deadline at noon on Thursday, March 17, 1983.

  • Three organisations responded to the invitation. The Aero Club submitted a significantly higher bid for both classes of aircraft, placing it in the Town Hall letter box at 11 am on the deadline day. However, due to an administrative error, the Aero Club's bid was considered late, and the licence was awarded to Red Rose Helicopters.

  • After discussions, it was revealed that the Aero Club's bid was delivered on time, leading the Council to declare the previous round of tenders invalid and invite new ones. However, Red Rose Helicopters claimed they had a contractual right to the licence, and the Council withdrew the second round of tenders, proceeding with Red Rose Helicopters.

  • The Aero Club brought the case to the High Court, where the judge ruled in favour of the club. Hence, this appeal by Blackpool BC.

JUDGMENT

  • The Court ruled in favour of the Aero Club.

COMMENTARY

  • The case raises important issues regarding the formation of contracts through an invitation to tender and the significance of compliance with the tendering requirements. The Aero Club's bid constitutes acceptance of the Council's unilateral offer, as it fully complied with the tender's terms before the deadline. However, due to the administrative error, the Council considered the bid late and rejected it, leading to the need for a rescheduled tendering process.

  • The case highlights the importance of strict compliance with the tendering procedures and the implications of administrative errors in such processes. It also serves as a cautionary example of the legal complexities involved in tendering for contracts and the significance of adhering to contractual terms to ensure fairness and transparency in the selection process.

ORIGINAL ANALYSIS

  • Defendant invited tenders to run an airline route by a certain time, but said that they might accept no offers. Plaintiff submitted their tender on time but, due to a mistake by Defendant’s employee, it was not received or considered.

  • CA said that:

    1. Invitations to tender are usually no more than assertions that one will receive bids and

    2. terms are not lightly implied into contracts.

  • However in this situation, the conduct of Defendant suggested an undertaking to consider all bids handed in on time (i.e. a unilateral contract to consider a bid IF tendered on time) and they had breached this contract. 

Bingham LJ

  • Because the tendering parties are so weak compared to the party receiving the tenders (creating a tender has no certainty of winning and involves preparatory costs), it is at least, under unilateral contract, entitled to have its tender opened and considered.

  • He says that the invitation to tender was an offer to enter this unilateral contract. 

----

In creating an exception to the general rule that an invitation to tender is NOT an offer of any sort, which the CA accepts and sustains, they consider:

  1. The small number of parties to whom the invitation was addressed (though Bingham’s argument about weakness of bargaining position is stronger if there are more parties);

  2. The tender process was “clear, orderly and familiar” (again, this could apply to ANY tendering process); and

  3. All parties assumed that on-time tenders would be considered (again this could apply to almost ANY tendering process).

Thus the basis on which the courts found an exception to the general rule is unclear. 

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Contract Law Notes
1,511 total pages
744 purchased

Contract law notes fully updated for recent exams at Oxford and Cambrid...