For there to be an implied obligation on the local authority to consider the tenders duly received, it is presupposed that a contract existed between them and the club. To address this question, the earlier courts decided that a collateral contract had in fact formed between the two parties. This is the crux of the issue surrounding the local authority's alleged liability in contract—was there really such a contract? The earlier decisions are problematic since the three fundamental criteria—offer and acceptance, intention to create legal relations, and consideration—for constituting a contract were simply not met. Firstly, there must be a specific offer and a specific acceptance for a contract to be formed—yet in the present case neither was present. There was neither offer nor acceptance on either side to have the local authority consider all or any tender. Even if the club's action of handing in the tender on time could be construed as an acceptance, this is based on the assumption that there was an offer in the first place—which there clearly was not.
There was nothing in the invitation to tender specifying that the club would consider all or any tender duly received—all three judges at the Court of Appeal agreed as much. On the contrary, it was detailed that “The council do not bind themselves to accept all or any part of any tender.” Thus, the invitation to tender was only an invitation to treat and nothing more—we should not read into it any more than what it was.
[...] v Dickman [1989] Q.B Donoghue v Stevenson [1932] AC 562 Gibson v Manchester City Council [1979] 1 WLR 294 Hedley Byrne & Co. Ltd. v. Helley & Partners Ltd. [1964] AC 465 Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 Lennon v Commissioner of Police of the Metropolis [2004] 1 WLR 2594 Lochgelly Iron and Coal Co. [...]
[...] Would it simply be that the club would have its tender considered? And for the local authority, would it be an additional tender, and consequently the possibility of a higher offer, to consider? We find such speculations problematic as considerations to a contract, because they have no economic value per se and are thus not sufficient. Concerning the formation of contracts, it is important to have sufficient certainty concerning the details as well, as was established in Gibson v Manchester City Council [1979] 1 WLR 294 and Baird Textiles Holdings Ltd v Marks & Spencer plc [2001] 1 All ER (Comm) 737. [...]
[...] If the parties had wanted such a contractual relationship, they would have expressed it in contractual terms. However, the most important circumstance put forth by the club was the notion that there was a clear intention on both sides that all timely tenders would be considered—which was also the main argument of the Court of Appeal judges. Although this is true, it is vital to understand that there is a difference between an intention to act in a certain way and an intention to create legal relations to act that way. [...]
[...] Helley & Partners Ltd. [1964] AC 465, and further reiterated in Reid v Rush & Tompkins Plc [1990] 1 WLR 212, White v Jones [1995] 2AC 207 and Lennon v Commissioner of Police of the Metropolis [2004] 1 WLR 2594. According to the former case, a duty of care is owed where two categories of relationship are concerned: Firstly, when there is a fiduciary relationship. Secondly, when there is a “voluntary assumption of responsibility” on the defendant's part in his tendering of skilled advice or services in circumstances where he knows or ought to know that an identified plaintiff will rely on his answers or advice. [...]
[...] 25) However, it is highly unlikely that the relationship between the local authority and the club was so special as to warrant this; there is simply no “other nexus sufficient to create proximity”, as Taylor LJ put it in Caparo Industries Plc. v Dickman [1989] Q.B It is interesting to note that in French law, the damage done to the club would be admissible under Article 1382 of the Code civil, which obliges the party causing the damage to make reparations. [...]
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