Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council

Court of Appeal

Citations: [1990] 1 WLR 1195; [1990] 3 All ER 25; (1991) 3 Admin LR 322; (1991) 155 LG Rev 246; [1991] CLY 523

Facts

The defendant was a local authority who owned an airport. In 1975, they granted the claimants a concession which allowed them to operate leisure flights out of the airport. In 1983, discussions began on renewing the concession. The defendant put the concession up for tender. The tender invitations, which were sent to the claimant and six others, stated that the defendant did not bind themselves to accept any particular tender. It also stated that tenders not delivered by a particular date would be invalid.

The claimant posted their tender personally in the defendant’s letterbox before the deadline. However, the defendant’s staff failed to empty the letterbox until after the deadline had passed. The defendant accepted another person’s tender. The claimant sued the defendant for breach of contract and negligence. They argued that the defendant had a duty (either in contract, tort or both) to properly consider all tenders which met the invitation criteria.

Issue(s)

1. Was there a collateral contract obliging the defendant to properly consider duly submitted tenders?
2. Did any similar obligation arise in tort?

Decision

The Court of Appeal held in favour of the defendant. The invitation and submission of tenders created a collateral contract requiring the defendant to duly consider all tenders properly matching the criteria. The defendant had failed to do this, so he was in breach.

This Case is Authority For…

Invitations for tenders are normally invitations to treat, not offers. Therefore, defendants are not obliged to accept any particular tender.

However, invitations for tenders may give rise to a collateral contract which requires the defendant to properly consider all tenders submitted in accordance with the invitation. This turns on whether a reasonable observer would think it obvious that the defendant could not accept a tender before they had considered all valid submissions. This is particularly likely where:

• There a small number of parties given the invitation;
• The form of tender is a standard and formal one;
• There is a concrete deadline; and
• The proposed contract terms are not open to negotiation.

Other

The court was reluctant to express an opinion on whether a duty would be owed in tort if there had been no contractual duty. Bingham LJ ‘tentatively’ concluded that it was unlikely that there was a duty in tort if there was no duty in contract.