These cases demonstrate the nature of protection afforded by the common law in this area. The level of damages awarded to Harmon were substantial, reflecting its loss of opportunity (profit on the project) and the costs incurred in preparing its tender, totalling circa £2million.
In Adferiad Recovery Ltd v Aneurin Bevan University Health Board [2021], the claimant's tender was considered, but it argued the defendant had failed to meet its contractual obligations to:
(i) evaluate tenders fairly, in good faith and in accordance with the tender documentation; and
(ii) make an assessment free from any manifest error. Judge Keyser QC carried out an objective assessment of the factual evidence to ascertain whether, in his opinion, a contract was implied and, if so, what its terms were. Judge Keyser QC held that:
- A contract of the kind recognised in the Blackpool and Fylde and JBW Group cases … would not avail the claimant, because there is no arguable case that the defendant failed to comply with that limited obligation if it existed.
- A contract of the kind relied on by the claimant, including obligations to conduct the assessment free from any manifest error, goes far beyond the limited contract accepted in those cases and could only be implied upon compelling factual grounds, which are wholly lacking in this case.
- Moreover, the crucial requirement of objectively demonstrated intention to undertake the contractual obligations relied on is not only absent but expressly negatived by the tender documentation. That documentation is inconsistent with any intention on the part of the defendant to enter into voluntary contractual obligations at all (thus precluding even a Blackpool and Fylde contract).
Judge Keyser QC was also critical of the claimant attempting to create a contractual basis for obligations which would have arisen under the Procurement Regulations if it had applied (as in JBW Group). This case demonstrates that the extent of protection under common law for tenderers can be limited.
Proving the existence of an implied tender contract turns on the facts. There is a need to demonstrate, inter alia, there was an intention between the parties to create binding contractual relations. Wording within an employer's tender documents, which expressly sets out the parties' intentions, can prevent a tender contract from coming into being – the following wording did just that in the Adferiad case.
21.2.6 Nothing contained in this ITT or any other communication made between the Customer shall constitute an agreement, contract or representation. Receipt by a potential supplier of this ITT does not imply the existence of a contract or commitment by or with the Customer.
Where a contract can be shown to exist, the scope of that contract (i.e., what the agreed terms were) is even more difficult to prove, especially where the contention is the terms are more onerous than that considered in the Blackpool and Fylde and JBW Group cases. Such cases will turn on an objective assessment of the evidence, but such terms 'could only be implied upon compelling factual grounds' with sufficient evidence to support it.