Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council

An invitation to tender is ordinarily an invitation to treat, but a binding ancillary contract may arise from a structured invitation sent to selected tenderers. Where the invitation prescribes a clear procedure, a fixed deadline and conforming tender requirements, a timely conforming tender may constitute acceptance of an implied promise that it will be opened and considered with other conforming tenders.

The promise is limited. It does not oblige the invitor to accept a tender or award the underlying contract. It protects the tenderer’s contractual right to have its tender put before the decision-maker before an award is made.

Blackpool and Fylde Aero Club Ltd sued Blackpool Borough Council for damages after the Council failed to consider the Club’s timely tender for a pleasure-flying concession at Blackpool Airport. The Council’s staff did not empty the Town Hall letter box at the stated deadline. The tender was then wrongly treated as late and excluded from consideration.

Judge Jolly, sitting in the Queen’s Bench Division at the Manchester District Registry, decided liability in the Club’s favour in contract and negligence, with quantum deferred. The Council appealed. The central issue was whether the invitation to tender created a contractual obligation to consider a tender submitted in time and in the prescribed form.

1. Appeal dismissed. Lord Justice Bingham gave the leading judgment. Lord Justice Stocker agreed with its detailed reasoning and added observations. Lord Justice Farquharson agreed.
2. The ordinary rule in Spencer v Harding [1870] LR 5 CP 561 and Harris v Nickerson [1873] LR 8 QB 286 did not prevent a limited contract arising here. The Council had invited a small, identified class to tender under a formal and tightly prescribed process. It supplied anonymous tender envelopes, a common form, draft terms and an absolute deadline. In that setting, a reasonable invitee could understand that a timely conforming tender would be considered if other tenders were considered.
3. The Council’s invitation was therefore an offer to enter that limited process contract. The Club accepted it by submitting a timely conforming tender. The contractual obligation was to place the Club’s tender before the officer or committee deciding whether to make an award, and to consider it before accepting another tender.
4. The Court stressed the limits of the obligation. The Council remained free not to accept any tender or not to award the concession, provided that decision was bona fide and honest. It was not obliged to accept the Club’s tender or any other tender.
5. In deciding whether to imply such a contract, the court had to be confident that the parties intended legal relations and that the agreement had the asserted content. In most cases it should also be possible to identify the mechanism of offer and acceptance. Those requirements were met on these facts.
6. It was unnecessary to determine the alternative negligence claim. Lord Justice Bingham expressed only a tentative view that it would fail if the contractual claim failed. The appeal was dismissed with costs, and leave to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division). The Council’s appeal was dismissed: [1990] 1 WLR 1195.
• High Court, Queen’s Bench Division, Manchester District Registry. Judge Jolly found for the Club on liability in contract and negligence; quantum was deferred. No citation for that decision is stated in the judgment.