Decided 13 December 1994 Judge(s) sitting Gallen J Location New Zealand | Citation(s) [1995] 1 NZLR 469 End date December 13, 1994 | |
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Full case name Pratt Contractors Ltd v Palmerston North City Council | ||
Pratt Contractors Ltd v Palmerston North City Council [1995] 1 NZLR 469 is a cited case in New Zealand regarding contract formation involving tenders.
Contents
Background
The Palmerston North City Council put out for tender the construction of a flyover. The tender documents set out detailed criteria and plans for the construction of the flyover, and was to be awarded to the lowest tenderer.
However, a rival contractor submitted a tender for the construction of a redesigned flyover, and the council subsequently accepted that tender, without giving the other tenderers the opportunity to submit a tender for the new design.
After discovering all this, Pratt Contractors sued the council for damages.
Held
The court held that the city council tender was a legally binding obligation, and as a result the city council should have given Pratt Contractors the opportunity to revise and resubmit their tender. The court awarded damages of $17,822 for reimbursement of the costs in preparing the tender. On top of this, damages for $200,000 for loss of profit was also awarded.
Footnote: The judge noted that the council could have alternatively accepted none of the tenders instead.