Contract Law and Tender Procedures

The assignment presents a legal scenario involving a contract dispute between Alcatraz and a government department. Alcatraz claims the department breached their contract by awarding a tender to Trident, another company, instead of fulfilling their prior agreement with Alcatraz. The analysis requires examining the relevant legal principles of contract law and statutory illegality to determine the validity of both parties' claims. It also explores potential legal actions Alcatraz can take against the department for breach of contract and unfair tender procedures.

Running Head: CONTRACT LAW 0
Contract Law

CONTRACT LAW 1
Introduction
Tender is an invitation to offer in which a corporation calls for bids from the prospective bidders.
The company selects the best option as per its requirement and accepts the offer made by the
bidder. In the present case, the NSW Department of Administrative Affairs invited tender from
independent contractors to increase the safety of its main office. The department made an
advertisement of tender and directed the parties for the online registration. The Alcatraz Security
Systems Pty Ltd submitted their tender by complying with the guidelines provided by the
department, although, the guidelines provided by the department to Alcatraz did not disclose all
the necessary information as per section 5. The department accepted the tender of Trident
Systems Pty Ltd, which quoted its price at 50 percent more than Alcatraz. Frank discovered that
head of the department leaked the details of his tender to Trident before they submitted their
tender.

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Issues
The issues of this case include, whether the NSW Department of Administrative Affairs is under
an obligation to admit the tender of Alcatraz. Another issue is that if the department is not
obligated then whether Alcatraz has any contractual right.
Rule
The common law of Australia guides the contractual behavior between the parties to a contract.
According to the common law of the contract, offer and acceptance are the essential elements for
establishing a valid contract between two parties. One person is required to give an offer which
another party must accept without any change in requirements1. Further, the common law
distinguishes between an offer for contract and an offer which is merely a request to the party, in
order to create offers to do negotiations related to the contract. In Spencer v Harding Law case2,
the court held that the advertisement was an invitation to contract and the tender was a proposal,
the defendant has right to admit such tender or not. In the case of Pharmaceutical Society of
Great Britain v Boots Cash Chemists (Southern) Ltd3, the court provided that the price tag
displaying on a dress in a shop is considered an invitation to offer, not an offer for a contract4. If
a customer approaches the shopkeeper to buy such item, then it cannot be considered as an
acceptance rather it is an offer which may or may not be accepted by the shopkeeper. Further, in
the case of Carlill v Carbolic Smoke Ball Co5, the court held that a general offer is a valid offer if
any person accepts such offer then the person automatically enters into the legally binding
1Elisabeth Peden. "Incorporating terms of good faith in contract law in Australia." Sydney L. Rev. 23 (2001): 222.
2Spencer v Harding Law (1870) Rep. 5 C. P. 561
3Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1953) EWCA Civ 6
4 Guenter Heinz Treitel. The law of contract. Sweet & maxwell, 2003.
5Carlill v Carbolic Smoke Ball Co (1893) 1 QB 256; [1892] EWCA Civ 1

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contract with another person. In AGC (Advances) Ltd v. McWhirter case6 the court held that in
case of an auction, it is only an invitation to treat not an offer and bidder at auction make an offer
for the acceptance of the auctioneers which can be and cannot be accepted. Further, in the case of
Blackpool & Fylde Aero Club v Blackpool Borough Council,7 the court held that if an invitation
to offer is made only to selective parties, along with clear guidelines for submitting the bids, then
such invitation to offer is considered as an offer. After that, any bid or tender submitted by any of
such selective parties will be considered to be an acceptance and not an offer, and therefore such
parties will be bound by the contractual obligation8.
Application
The Government Act 9 provides an imperial, organized, open procedure of tender in which
government officers are required to disclose all the necessary guidelines and information
regarding the tender. In this instant case, the department did not provide all the information
which is mentioned in another provision of this Act, neither the information was fully provided
at the time of acceptance of tender by the officer. Further, provision of above Act provides the
disciplinary power to the minister, in which such minister can penalize a government officer who
breaches any rule of this Act. As per the guidelines, the details of the tender will not be revealed
to anyone. In this case, the Managing director of Alcatraz Company alleged that the Department
disclosed tender’s important information to Trident before the admission of tender, therefore,
Alcatraz can complain to the relevant minister.
6AGC (Advances) Ltd v. McWhirter (1977) 1 BPR 9454
7Blackpool& Fylde Aero Club v Blackpool Borough Council (1990) EWCA Civ 13
8 Adams, John N., and Roger Brownsword. "More in Expectation than Hope: The Blackpool Airport Case." The
Modern Law Review54.2 (1991): 281-287.
9The Government Act 1999 (NSW) ss 2, 4, 5, 30

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One of the guidelines of the contract provided that the department is not obligated to accept the
offer with lowers quote price, the department has right to select whichever tender they prefer to
choose. As per the case of Blackpool & Fylde Aero Club v Blackpool Borough Council10, the
court provided that the council is bound to accept the tender and provide the license to Red Rose
Helicopters. In this case, the department provides wrong guidelines to Alcatraz, and the tender of
Alcatraz was not considered by the department. The department is in a primarily contract with
Alcatraz because they did not provide correct information regarding the guidelines of the
contract. The primarily guidelines force the department to provide a fair tender procedure to the
Alcatraz11.
The department can provide an argument that on they mistakenly provide the wrong guidelines
and they did not have a fraudulent intention of not providing proper tender opportunities to
Alcatraz. The department can also argue that one of the conditions in the guidelines of the tender
provided that the department is not bound by any tender and they can select any tender they
decided. Therefore, even if the wrong guidelines were provided to Alcatraz, the department has
right to select any other tender of their choice.
As per the judgment of Blackpool & Fylde Aero Club v Blackpool Borough Council12, the
argument of the department is not valid. As per the provision of Government Tenders Act 1999,
the department is obligated to provide a reasonable, open and systematic tender process to all the
participants. By selecting the tender offer of Trident, the department did not provide a fair
opportunity to Alcatraz; therefore, the acceptance of Trident’s offer is illegal under statutory
10Blackpool& Fylde Aero Club v Blackpool Borough Council (1990) EWCA Civ 13
11 Sidwell, A. C., D. Budiawan, and T. Ma. "The significance of the tendering contract on the opportunities for
clients to encourage contractorled innovation." Construction Innovation 1.2 (2001): 107-116.
12Blackpool& Fylde Aero Club v Blackpool Borough Council (1990) EWCA Civ 13

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illegality. The acceptance of Trident’s tender shall be considered invalid because the department
did not have right to provide such tender to another party13.
According to the law of contract, Alcatraz has the right of legal contract, and they can sue the
department for not providing them the opportunity of a fair tender procedure. As per section 30
of the Government Tenders Act 1999, the relevant minister has the power to discipline the officer
which contrivance he provisions of this act, as per the Government Sector Employment (General)
Rules 2014. Alcatraz can file a suit and held the officer of the department liable for not sending
him correct guidelines and allowing the tender to another party when they have a primarily legal
contract between them14. Although, the guidelines of the contract provided that the department
can select any tender they want but according to the Government Tenders Act 1999 the
department is liable to provide the tender to Alcatraz.
13The Government Act 1999(NSW) s 5
14 Gooley, John V., Peter Radan, and Ilija Vickovich. Principles of Australian Contract Law: Cases and Materials.
LexisNexis Butterworths, 2007.

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Conclusion
From the above observations, it can be concluded that department did not provide a fair tender
opportunity to Alcatraz. The department has right to select the tender of their choice, but the
officer failed to provide correct guidelines to Alcatraz. The Alcatraz and the department have
primarily legally bounding contract which provides various rights of the contract to Alcatraz.
The department did not have right to provide tender to another party because they have a legal
contract with Alcatraz. Therefore, the tender provided by department to Trident shall be
considered as void. Alcatraz has right to file a suit against the department for not providing a fair
opportunity for tender offer and leaking the tender information to another party. The department
is liable not providing reasonable opportunity and transferring the contract to another party.

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Bibliography
A. Articles/Books/Journals
Adams, John N., and Roger Brownsword. "More in Expectation than Hope: The
Blackpool Airport Case." The Modern Law Review54.2 (1991): 281-287.
Gooley, John V., Peter Radan, and Ilija Vickovich. Principles of Australian Contract
Law: Cases and Materials. LexisNexis Butterworths, 2007.
Peden, Elisabeth. "Incorporating terms of good faith in contract law in Australia." Sydney
L. Rev. 23 (2001): 222.
Sidwell, A. C., D. Budiawan, and T. Ma. "The significance of the tendering contract on
the opportunities for clients to encourage contractorled innovation." Construction
Innovation 1.2 (2001): 107-116.
Treitel, Guenter Heinz. The law of contract. Sweet & maxwell, 2003.
B. Cases
AGC (Advances) Ltd v. McWhirter (1977) 1 BPR 9454
Blackpool& Fylde Aero Club v Blackpool Borough Council (1990) EWCA Civ 13
Carlill v Carbolic Smoke Ball Co Court of Appeal (1893) 1 QB 256; [1892] EWCA Civ 1
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1953)
EWCA Civ 6

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Spencer v Harding Law (1870) Rep. 5 C. P. 561
C. Legislations
The Government Act 1999 (NSW)
The Government Sector Employment (General) Rules 2014