Tenders for Construction Contracts

The decision of the Supreme Court of Canada in M.J.B. Enterprises Ltd v. Defence Construction (1951) Ltd. deals with a number of points important to construction contracts and to contract law generally. Defence Construction invited tenders for a construction project at a Canadian Forces base. Four tenders were submitted, the lowest of which included a handwritten note qualifying the bid by a provision that in certain circumstances extra payments were to be made. The principal issues were whether there was a contract between the plaintiff and Defence Construction, and what were its terms. This article discusses the court's stance in the case on the issues of contract formation, implied terms, the interpretation of a privilege clause, and good faith