A municipal transport authority publishes a notice in a national newspaper inviting registered suppliers to submit competitive tenders for supplying 50 new buses. Apex Motors submits the lowest priced tender meeting all technical specifications. Before the transport authority formally accepts any bid, Apex Motors attempts to withdraw its tender, claiming no binding contract has been formed. Which of the following legal statements correctly evaluates the position of the parties under the law of contract?
- The newspaper notice is an invitation to treat and Apex Motors' tender is a legal offer, which Apex Motors can revoke at any time prior to formal acceptance.Cevap
- BThe newspaper notice constitutes a binding unilateral offer, and Apex Motors' tender submission completes a binding contract that cannot be revoked.
- CApex Motors' tender submission is an invitation to treat, while the transport authority's newspaper notice represents a standing offer.
- DThe submission of the lowest tender automatically constitutes legal acceptance, forming an irrevocable valid contract upon receipt.
Cevap
The newspaper notice is an invitation to treat and Apex Motors' tender is a legal offer, which Apex Motors can revoke at any time prior to formal acceptance.
Under the law of contract, an advertisement inviting tenders is classified as an invitation to treat rather than a binding offer. Consequently, the submission of a bid by a contractor constitutes the actual offer. Because an offer can be revoked at any time prior to its acceptance by the offeree, the contractor is legally entitled to withdraw its tender before the transport authority formally accepts it.
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Distinction between an Invitation to Treat and an Offer in Tender Contracts
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