1. What are the main features must a contract have to be enforceable?

Answer: The following features should be included in contracts in order to enforce it

which are
• OFFER:
Willingness to be bound by the terms distinguished by the offeror or in other
word in clear intention of entering into a contract through demonstration of
commitment. Characteristic feature of an offer is that it must be clear, certain
and specific.
• ACCEPTENCE:
Accepting the offer by the offeree or the interested party whom the offer has
been made without changing the terms or conditions. Exclusion exists in case
of mailbox rule or unilateral offers.
• CONSIDERATION:
It can be demonstrated as a bargain element (legal value) associated with
contracts. Anything which can be valued promised to another when making a
contract and most common consideration is money but it can take the form of
various different things such as service, promised action, etc. It is the
prerequisite to make the contract legally binding and usually done by both the
parties and presence of bargain element makes the contract enforceable.
• CONSENSUS: Consensus or meeting of minds is one of the most influential
characteristic of contracts which indicates a mutual understanding between
both the party’s (offeror and offeree) to come to common ground in order to
establish a legally binding and in other words agreement on the fundamental
term of the contract rather than simply a social arrangement. Both parties
have to make sure that no misunderstanding or mistakes exist between them.
• CAPACITY TO CONTRACT: In order to enter into a contract or to make
bid the person or party must possess the capability which is to know and
understand the terms of contract to make it enforceable. Lacking of capacity
can be distinguished by the following terms mentioned below:

Minor. (not of sufficient age to enter into a contract example kid)

Insanity. ( example mentally disordered)

Intoxicated person. (example under influence of alcohol)
• LEGALITY: The objective and purpose of the contract must be legal which
is that it doesn’t contradict with common law (crime, opposing public policy)
to make it enforceable.
• FORMALITY: All contracts have some terms and conditions, presentation of
the contract in a definite manner usually designated as formalities for example
it must comply with statue of frauds and the parol evidence rule used in the
contract must be sufficiently clear and specific and has to be followed to make
the contract valid, formal and enforceable.

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2. A contractor was contracted by a builder to deliver and install windows by a
certain date. As the date approaching, the contractor refused to install the
windows on time unless the owner agreed to increase the contract price. The
owner reluctantly agreed in order to avoid a delay to the final completion date.
Once the work was completed, the owner refused to pay the additional money.
The contractor sued. What is the likely result, and explain why?
Answer: We can see that it is a clear case of economic duress because the course of
action of the contractor clearly relates to taking an advantage of the current
circumstances through unfair means (blackmailing or persuading) which is forcing
the owner to get into unfair agreement. According to contract Law this pressure is not
legal and therefore the further agreement is not at all valid due to the reason that it
was made under “economic duress”. In my opinion, this case will favour the owner
because he/she has a clear ground because the newly formed contract has no legal
binding linked to it so it is not an enforceable contract.
3. What is an “offer”? How and when can an offer be accepted?
Answer: An offer is a transparent and particular promise made by one person to
another, having a clear intention to make a legally binding contract where the offeror
(party making the offer) is willing to be bound and if the offeree accepts it the former
rule is also applicable to the offeree. The offer made to offeree (the recipient of the
offer) can be accepted according to the method expressed by the offeror if the offeror
mentions any specific method. The offer can be accepted either by promise or
performance.
Acceptance of an offer:
How an offer is accepted:
• An offer can be accepted by a particular person or party who knows about the
offer or whom the offer is subjected to.
• It must occur, before the offeror has withdrawn or revoke his offer
• An acceptance is effective when all the terms and condition mentioned in the
offer is accepted without any changes made otherwise it will take form of a
counter offer.
• Silence is not a form of acceptance because acceptance of an offer must be
clearly communicated.
When an offer is accepted:
• Unless acceptance by mail or telegram is invited communication of acceptance
is effective upon received.
• Before the offer has lapsed of time.
• According to the mailbox rule a contract is formed or the offer is accepted at
the moment the acceptance was posted.

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4. Generally, when can a communication be effective? What is the “postal
acceptance rule”? When can a revocation be effective?
Answer:
When communication is effective:

When the parties distinguished postal mail as the means of communication

between them:
If on party decides to accept an offer the communication is effective upon posting
the mail or can be said as acceptance is effected when posted.
When the parties distinguished telegram as the means of communication
between them:
Communication is effective at the time message is delivered to the telegraph
operator.
If neither of the two medium mentioned above are used:
The communication is effective only when it is actually received by the offeror.
Postal acceptance rule:
• According to the condition of the offer if it accepted through mail, on that
specific time acceptance is effective when posted, all other communications
effective when received.
• Contract is formed at the time of mailing even though the offeror may not be
aware of the acceptance until several days later.
• An offer can be revoked according to course of action which indicates change
of mind of the offeror and the offeree is well aware of it.
When revocation can be effective:
• Revocation is not effective until the offeree actually receives notice of
revocation.
• Revocation will be effective just before acceptance.
• An offeror who wants to revoke his offer which will took some time to reach
the offeree through mail and in the meantime an acceptance letter is already
posted which is also valid therefor an offeror who intends to revoke his offer
must act expeditiously as possible by telephone , telex etc.
• After the offer is accepted it is impossible to revoke it only the offeror who is
the master of his offer can revoke it.
5. An engineer has not been paid the last instalment for his consulting work on
Project A. The client says, “If you agree to give up your claim for the remaining
fees, I will consider hiring you as the consultant for Project B.” The engineer
agrees. But Project B is ultimately awarded to another engineer. Is the
agreement to forego the fees enforceable? Explain.
Answer: From the brief mentioned above we can sate that it is a case of “Economic
duress” cause it follows the second factor mentioned in economic duress which is
that the other party agrees to new contract only because there is no other place it
could go to get what he needs under the contract”. In this case the client is
persuading the engineer to come into an unfair agreement. Such burden on
perspective of the engineer is not legal hence the extra portion of the amended

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agreement is not binding because it was endorsed in such circumstance which is
known as “Economic duress”. According to me engineer has a fair ground to fight
back for the payment which is due. New contract is not at all enforceable.
6. Explain promissory / equitable estoppel?
Answer: Promissory/ equitable estoppel is a term used in contract law which is
actually a promise assured to other (second) party involved in a contract in order to
prevent the (first) party or person who made the promise from breaking the promise
and if the party or person does so then the innocent party can recover its damage
based on that promise or enforce the promise even though that promise was made
excluding any valuable consideration. Therefore, we can sum this up by stating the
fact that second party relied to the first party’s promise and acted upon to his
detrimental effect also it is important to mention that this reliance is reasonable,
detrimental, and foreseeable. Once a party asserts that a fact is true and another party
relies on that particular statement of fact and act accordingly to his detriment, the
statement of fact can’t later be revoked.
7. Explain briefly how can contractual obligations be discharged?
Answer: Contractual obligations can be discharged through number of ways, these
are:
• By Performance: Finishing the job for which he/she has been held
responsible through a satisfying manner, all the parties associated with the
contract perform their obligations successfully as per the terms and conditions
mentioned in the contract.
• By Agreement: It can be more specific if we use mutual agreement. At certain
condition the parties involved in the contract may decide not to proceed
further due to several reasons e.g. neither party has performed any duty
therefore there is a mutual release of the obligations, one party was unable to
perform.
• As Of Right: This indicates an option to the associated parties to terminate the
contract if one party (contractor) unable to perform as per required of the
owner or the payment method in terms of amount is not satisfactory for the
contractor.
• By Operation of Law: It is related to bankruptcy, insolvency and limitation
act. For example if an innocent party faces that the other party is altering a
term such as quantity or price without their consent, they can clearly sate that
that contractual obligation is discharged. Limitation act limits the time period
which a party can sue based on the breach of contract so basically making the
contract unenforceable thereby discharging contractual obligation.
• By Frustration: It indicates a specific situation or event which is beyond
controlling that makes it impossible, impartible for the performance of the
contract. It arises when the actual purpose of the contract doesn’t no longer
exists or intense physical incapability of the party, natural calamities generally
termed as force Majeure some act of third party etc.

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8. Which of the following is good practice for an owner awarding a contract?
Explain briefly.
a. seeking clarity from a bidder regarding an ambiguity in a bid before
awarding the contract
b. awarding the contract based on criteria not stated in the invitation for
tenders
c. accepting a bid that does not comply with all the mandatory criteria
stated in the invitation for tenders
d. refusing to negotiate with any bidders
Answer:
a. Yes, because when the owner and bidder are entering into a contract it is
obvious that contract should possess a mirror image for both the parties
(owner and bidder) which actually means that the contract document should be
transparent, specific, clear and free of error and also clearly understood by
both the parties in order to avoid any unnecessary situation upon arising.
Hence, before awarding the contract to a particular bidder the owner must be
in that position to make he/she clear of any terms included which is not clearly
understood by seeking clarity from the bidder.
b. No, In order to avoid liability, the owner should strictly adhere to the terms of
the invitation for tenders.
c. No, Owner can’t accept non-compliant bids and we can clearly sate that
mandatory criteria is the root of the contract and any alteration to this criteria
is not acceptable in any circumstances. In the case where the owner accept
non-compliant bids it will be clearly indication of breach of contract-A,
which actually protects the rights of owners and bidders both, not only that
accepting a non-compliant bid is will also treated as illegal and unfair means
with compliant bidders. Owner has the obligation to accept only the compliant
bids.
d. Yes, because negation’s with the bidders or selective bidder is a clear
indication of unfair means and injustice to all other compliant bidders. Under,
contract-A owner is bonded by the obligation to evaluate all the compliant
bidders fairly.
9. What are the owner’s options if all tenders exceed owner’s budget, or some
intervening reasons make part of the project unfeasible? Explain.
Answer: As we know, offeror is the master of his offer and can make any changes in
the contract/tender without an obligation it is a privilege clause, hence for this
situation owner can cancel all the bids or withheld the bids for certain period of time
in order to double check the tender whether to see any mistake has been made or some
important terms was omitted or not etc. Owner has the right to investigate whether the
bids are too high or any other unfair intention has been take place in order to make the
project unfeasible. The course of action shouldn’t be fall upon some hidden bad
motive.

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10. What have you learned from the Ron Engineering case?
Answer:
• It produced two new concepts Contract-A (bidding contract), and Contract-B
(construction contract).
• Traditional invitation or invitation to treat is considered as an offer to the
bidders and submission of a compliant bid as per the tender requirement is
considered as the acceptance of entering into contract-A.
• Contract-B is more focused on awarding the contract to a compliant bidder
after fair evaluation.
• Establishment of contract-A gives a fair ground for both the parties (owner
and bidder) with respect to its rights and obligations.
• Only apparent mistake (mistake on face) can be applied to the bidding contract.
• Apparent mistake is always applicable in terms of construction contract.
• These new concepts made the bidding procedure transparent and fair.
• It has been difficult for the involving parties in contract to abuse the process
after “Ron engineering case”.
11. What have you learned from the Naylor case?
Answer:
• It was obvious that contract-A was formed between Elis Don and Naylor
because the general contractor carried out the name and price tag of the sub-
contractor.
• Contract-A was not frustrated by OLRB decision because, as we know
discharge of a contract by frustration deals with condition which is beyond
controlling but not in this case because Ellis-Don nominated it as subcontractor
even after the decision and knowingly that Naylor Group Inc. does not meet the
requirement. Hence, the situation is not such that it couldn’t be avoidable.
• Ellis-don breach the term of contract-A because, Ellis-Don reaffirmed the risk
when Chance came to it when the owner made change to its project and it was
not compliant with contract-A At this point he has the option to drop Naylor
s’ bid and its name as subcontractor with respect to the OLRB decision
• Damages due to the breach of contract-A should be related to loss of profit
that can be achieve if performance was carried out.
12. What have you learned from the Chinook Aggregates v. Abbotsford case?
Answer:
• Privilege cost not necessarily gives the owner blind right to treat the bidders
with unfair means.
• In order to exercise local preference owner has to disclose it before he can use
it so that it doesn’t violate fair policy or breach of contract, where in this case
we can clearly understand that there is a breach of contract by the owner.
• The owner has to go with the conventional rue by accepting the lowest bid
unless the tender documents expressly stated that the bids would be evaluated
on other criteria which were missing in the tender documents for this case.
• In this case an un-stated policy cant doesn’t give the right to the city to turn
down the lowest bid without any clearly expressed requirement.

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 • Violates the mirror image rule because the tender document is not same for the
owner and bidder due to the course of action carried by the owner by adopting
a policy of secret local preference.
13. What have you learned from the M.J.B case?
Answer:
• In all circumstances owners should accept only the compliant bids
• If the bid is non-compliant or even irregular or informal the owner shouldn’t
accept this kind of bids.
• Accepting of compliant bid proves that every compliant bidder was evaluated
fairly. This is a right of every compliant bidder who desires to enter into the
contract.
• Privilege clause doesn’t give the owner right to accept bids which are informal
or irregular which eventually gives indication that owner is deals unfairly with
the compliant bidders who have spent money, time and effort in preparing the
bids in order to fulfill the necessary requirement of the invitation.
14. What have you learned from Double N Earthmovers case?
Answer:
• This case produces number of issues regarding contract-A and contract-B
framework which has been a governing factor after “RON ENGINEERING
CASE” in Canada.
• When contract-B is formed initial contract-A is terminated, in that sense now
the contractor/offeree has to perform according to contract-A with perspective
of contract-B but it can be relieved to some extent if the offeror wish to do so.
• The award is based on fair evaluation of all compliant tender documents, and
ultimately rewarded to lowest compliant bidders.
• Once contract-B is formed, the internal issue between owner and the offeree
can’t be a matter of concern between third party (Double N Earthmovers).
• Although there is an issue of compliance which can be resolved by
considering condition 17 which stated that tender conditions “must be strictly
complied with and failure to do so either in whole or in part may
invalidate the bid in question” along with the privilege clause condition-7
“The City reserves the right to reject any and all Tenders, and to waive any
informality therein, to award by item or class”
• So, we can state that Double N’s bid has received fair and equal treatment and
the arguments were unpersuasive.

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15. What have you learned from Tercon Case?
Answer:
• Awarding a contract to an unqualified bidder with full awareness
conflict the legal issue of the contract, this indicates unfair evaluation.

• The interpretation of the exclusion clause is subjective (different

meaning).

• Contract document must be clear, specific, transparent and free of

double meaning which was missing in this case.

• Exclusion clause bar can’t be used to claim damage because it includes

the default unless there is some fair ground for argument.

• Due to the fundamental term in the contract was breached by the owner
it was not fair or reasonable to enforce the exclusion clause in light of
such breach because it directly conflict with the fair policy issue.

• Exclusion clause turns out to be incompatible with perspective of the

contract document due to the course of action (unfairness) carried out
by the owner (ministry), by awarding the bid to an ineligible bidder.

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 ASSIGNMENT-1

Name: Saifi Rahman

ID: 1269184

Course instructor: June Han

Course number and name: CIV E 604 Construction Engineering

Law