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Contract Law

This term is used in two different ways, and these ways are very different in law. If a manufacturing plant requires, say, a large supply of steel girders, it may issue a document requesting suppliers of such girders to make offers. Although the document may be referred to as a 'tender' it is really an Invitation to treat, and not an offer. This means that if a supplier sends a lorry-load of girders and a bill, it may be disappointed; as not formal offer has been made and accepted, there is no Contract, and nothing is enforceable.

The second use of the term 'tender' is as an offer. If a supplier of steel girders responds to the tender described above (which is, strictly speaking, only an invitation to tender) with his own tender, setting out the price he would charge and the terms he would trade under, then this is an offer. The the manufacturing plant accepts the tender, then there is a contract.

Sometimes an invitation to tender may be construed as a unilateral contract, as well as an invitation to treat. For example, the document may state the terms under which it will accept offers. Commonly, an invitation to tender may say that the issuer will accept the tender with the lowest price received before a certain date. If someone responds to this invitation with what it thinks is an unbeatable offer, and it is not accepted, it could challenge the offeree for breach of the (unilateral) contract.