PTC v SUPPORT CONSTRUCTION (PVT) LTD 1998 (2) ZLR 221 (S)

Flynote

Contract — formation — tender — acceptance by party inviting tenders of bid — contract thereby formed with party submitting bid — signature of contract documents by party submitting bid — not necessary for party c inviting tenders also to sign documents for contract to be formed

Headnote

The appellant corporation invited tenders for the construction of a post office in Marondera. The tender documents were to be submitted to the Secretary of the Government's Tender Board. The respondent submitted a bid, and the appellant wrote to the respondent to say that the bid had been successful. Shortly afterwards, a further letter was sent, enclosing a contract documents, to be signed by the respondent and returned to the appellant. A few months later, the appellant wrote to the respondent, saying that the Tender Board had ordered it to cancel the contract and to accept a bid by another company. After fruitless discussions with the appellant, the respondent finally pointed out that the appellant was, in terms of the contract, obliged to pay the compensation for cancellation provided for in the contract. The appellant's response was that there was no contract. It was argued that acceptance of the respondent's bid should have been by the Tender Board, not by the appellant; alternatively, that the documents signed by the respondent had not been signed by the appellant and thus did not constitute an agreement.

Held, that the evidence was clear that the respondent had submitted his bid to the Tender Board, as required.

Held, further, that the tender was put out as a "PTC Tender" and the contract was to be entered into between the PTC and the successful bidder. The acceptance of the bid was therefore to be by the appellant, not by the Tender Board.

Held, further, that the evidence showed that there had been acceptance by the appellant of the tender. An invitation to tender is an invitation to treat. The tender is the firm offer and the acceptance of the tender results in a binding contract. The wording of the appellant's letter was not conditional. Even if the first letter could not be taken as an acceptance, the second one clearly stated that the respondent's bid had been accepted.

Held, further, that even if the letters did not constitute acceptance, the contract was concluded when the respondent signed, stamped and returned the contract documents sent to it by the appellant. It was not necessary for the appellant to sign them for the contract to be binding.