a) The Krachi Assembly having an Airport in its locality grants a single concession to operaters for pleasure flight from the airport. For a period of ten years that licence had been held by the Njoku club. When the concession came up for renewal, the Assembly decided to invite competitive tenders for it. Tenders were to be submitted by 12:00 pm on a given day. The Assembly’s, letter box was not cleared between the time of the club posting its tender and the closing time for the bids, with the result that the club’s tender was not considered.

The club claimed that the Assembly was in breach of a contract as it has not considered all tenders received before the deadline.

Required:

The Njoku club, in the case above, claimed that the Assembly was in breach of a contract for not considering all tenders received before the deadline. Explain. (5 marks)

The question deals with the issue of contract by tender.
Tender is a negotiating device common in the world of major commercial contracts. A company seeking to purchase a major item or service, such as a piece of equipment or some construction work, will invite tenders from those interested in supplying goods or services sought. Such invitations may be published generally, or in a trade journal, or circulated to companies likely, to be interested.
Under normal circumstances, the invitation for tender is not treated as an offer, since the company issuing it may have other criteria other than the price which they take into account in awarding the contract.

However, it is always possible that a request for tender be both specific and intended to be turned into a contract by mere acceptance, in which case, it will be an offer. The usual case is where the expression, ” Highest bidder” or “lower bidder is used, indicating a system of competitive tendering, mode which the person issuing the invitation to tender has declared himself willing to be bound by the most competitive bidding. The first issue to be addressed is to determine whether there was a contract in view of the position taken by the Njoku club.In the circumstance of this case the Njoku club is saying that the Krachi Assembly was in breach of contract to consider all tenders received before the deadline.
The complaint of Njoku club is justified because there was a contract governing the conduct of the tendering process, and it was an implied term of the contract the all bids arriving before the deadline would be considered, even though contracts are not lightly to be implied. Even though contracts are not lightly to be implied in this particular case, it is in the interest of doing substantive justice that the complaint of Njaku club, that one would agree with it that the Krachi Assembly was in breach to have considered all tenders received before the deadline, because the Assembly’s letter box was not cleared between the time the clubs tender was posted and the closing time for the bids. A notice from requesting institutions to submit tender in whichever form is not deemed as an offer to procure or supply but invitation to treat. Thus tender notices are merely intended to invite tenders and ascertain whether an acceptable offer can be obtained. It is the tender which constitutes the offer which may or may not be accepted. To say that there is breach of contract is to say in that the elementsthat lead conclusively.
(5 marks)