Legal Case Summary
The lawsuit between Ron Engineering and Construction Ltd. and the Government of Ontario can be considered one of the most consequential and prominent quarrels in Canada. Events that led to the court case concentrate on mistakes in procurement (McKendrick, 2020). In particular, Ron Engineering, a contractor on a construction tender, has discovered an error in formulating its bid as $750,058 was missing from the total sum (The Queen (Ont.) v. Ron Engineering, 1981). Therefore, the company decided to withdraw from the process without penalty and asked to recover the deposit (McKendrick, 2020; The Queen (Ont.) v. Ron Engineering, 1981). The lawsuit that emerged due to a mistake has set a precedent for many other arguments.
Ron Engineering ‘s (The Plaintiff) Position
Ron Engineering and Construction Ltd. held the position of the plaintiff. To understand why the firm believed it was entitled to the deposit, one must consider that before 1981, the rules overseeing tender calls were based on general contract law (Morrison & Dunbar, 2021). Such a practice resulted in bids being offers that did not initiate legal obligations until they were formally admitted (Morrison & Dunbar, 2021). Consequently, while owners could impose further conditions after receiving all proposals, bidders could withdraw their submissions prior to acceptance (Morrison & Dunbar, 2021). Accordingly, Ron Engineering stated that notice of its error had been given to the opposing party before the approval of the tender (The Queen (Ont.) v. Ron Engineering, 1981). Therefore, the plaintiff insisted on the rightfulness of their position due to the conventional norms regarding bids.
The Government of Ontario Position
In contrast, The Government of Ontario was the defendant in the lawsuit. After receiving the plaintiff’s notice, the owner presented the contract in the prescribed form for Ron Engineering’s signature, which the contractor declined (The Queen (Ont.) v. Ron Engineering, 1981). As a result, The Government of Ontario relied on the tender deposit term with the notion that nothing in the documentation supported the contractor’s position (“Procurement,” 2020; The Queen (Ont.) v. Ron Engineering, 1981). Therefore, the defendant believed they could keep the deposit because the agreement did not prohibit doing so.
The Ruling
The decision made by the Supreme Court has affected the regulations concerning tenders in the country. The Court ruled that the owner should keep the deposit (The Queen (Ont.) v. Ron Engineering, 1981). The rationale for such a solution was due to acknowledge that parties involved in bidding are bound by two distinct arrangements, a tendering contract and a procurement contract (Lambert, 2020). The former paper, referred to as Contract A, is the initial agreement that exists in response to an invitation to a tender (Ouatu & Sahota, 2022). The former document, known as Contract B, emerges when the owner accepts one of the compliant bids (Ouatu & Sahota, 2022). Such an understanding and the following changes to regulations were important to maintain the justice and integrity of the tendering process (Ouatu & Sahota, 2022). Accordingly, by satisfying the defendant’s position, the Supreme Court induced changes in other bidding procedures.
Personal Reflection – Mistakes in Procurement
Based on the reviewed case, it appears that mistakes in the procurement process should be treated in a way that would set establish justice between all the involved parties. While the lawsuit between Ron Engineering and the Government of Ontario ruled for the benefit of only the defendant, it has identified the need to formulate rules that would protect the rights of both owners and bidders. Consequently, to prevent any errors, regulations and agreements should be clear, precise, and consider various matters that may arise in relation to tenders.
References
Lambert, N. (2020). Effective remediation in public procurement: Contract damages versus judicial review. Ottawa Law Review, 51(2), 361-394.
McKendrick, E. (2020). Contract law: Text, cases, and materials. Oxford, England: Oxford University Press.
Morrison, H. L., & Dunbar, I. R. (2021). The tendering process – A legal overview. Public Entities, 1-4.
Ouatu, M., & Sahota, S. (2022). Non-compliance and substantial compliance of tender bids. Civic Legal, 1-6.
Procurement 101: How not to turn your next procurement in to new case law. (2020). Web.
The Queen (Ont.) v. Ron Engineering. (1981). 1 SCR 111, 1981 CanLII 17 (SCC), Web.