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SPENCER v HARDING

General Principle:


An invitation to tender is usually classed as an invitation to treat.


Name:


Spencer v Harding (1870) LR 5 CP 561


Facts:


Harding (defendant) distributed advertisements that said he was putting some stock up for trade. It also said that he was willing to accept tenders. The defendants decided not to sell the stock to the highest bidder, which was Spencer. Spencer sued, saying that Harding was compelled to accept the highest offer.


Ratio:


The court in Spencer v Harding held that the submission of a tender was an offer, and not acceptance of a contract. There was no agreement in place. The circular was nothing more than a declaration of purpose, and as such, it functioned as an invitation to treat. The bids served as offers, which the defendants were at liberty to either accept or decline.


Application:


A person has no obligation to accept the highest tender.



Spencer v Harding (1870) LR 5 CP 561

Analysis:


In contract law for a contract to exist one party (“the offeror”) needs to make a clear and certain offer and the other party (the offeree) needs to communicate their equally clear and unequivocal acceptance. A competitive tender is where the proposed contractors provide the CUPD with a confidential bid for the work. The CUPD then choses the lowest bid to conduct the work. The CUPD’s invitation to tender is an invitation to treat. An invitation to tender is usually classed as an invitation to treat. As a result, the person making the invitation to tender is not obliged to accept any of the offers (in the form of responses) to the tender. This was seen in Spencer v Harding (1870) LR 5 CP 561 where the court held the offer begins with the person issuing the tender, which can then be accepted or rejected. It is an invitation to treat and, therefore, it cannot amount to an offer. The tender is the offer and then CUPD choosing the lowest tender is the acceptance.



Spencer v Harding

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