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This article is written by Sri Vaishnavi.M.N., a first-year student of Damodaram Sanjivayya National Law University, Vishakapatanam. In this article, she discusses tender and the requisites of a valid tender.

Introduction

A tender is an offer. It is something that invites and intends to invite, acceptance. Sometimes, in the case of large contracts, a list is prepared, tabulated and the names of all contractors who have tendered are displayed; and in front of each name, it indicates the total price offered and also the observations made by the contractor or a particular condition that the contractor wishes to regulate its execution of the work.

An estimate is a valuation or statement, in advance, of the amount for which a certain job will be performed or can be performed. An estimate may or may not amount to an offer or offer to do the job for that price. Whether an estimate is an offer or not is a matter of fact, and an offer is an offer because it is described as an “estimate”.

The offer made is an offer to meet a condition or obligation together with the current capacity of immediate execution, so if it were not for the refusal of cooperation of the party to which the offer is made, the condition or obligation would be met immediately. 

As the condition or obligation in question may require compliance, be it payment or transfer of ownership, the offer may be related to money or property. In the strict sense of the word, there can be no offer, no service or other performance that requires time. The offer of an unfinished amount of money is also, in the strict sense, impossible to perform.

The issuance of the bidding forms is an invitation to make an offer, and as the offer must be acceptable, must be in the lines provided by the buyer, it is necessary to ensure that the invitation to tender includes all the necessary information and the form Bidding. 

It is written in such a way that the conditions of the contract and other documents are incorporated effectively. If it is intended that there be a “formal” contract, whether or not it is sealed, it must be indicated in the invitation. In addition, copies of the contract conditions and the proposed agreement must be submitted with the bid form (along with the specification, drawings, etc.), or at least be available for inspection. 

When the offers are received, they must be examined carefully to see if they comply with the terms of the invitation. A well-written bidding form and the use of standard contract conditions will go a long way towards ensuring this. Any alteration of the terms by the tender must be considered with a view, first, to see if they are acceptable and, secondly, to investigate what effect, if any, is likely to have, in the law, on the Contract conditions.

Requisites of valid tender

A tender is an offer. It is something that you invited and communicated to notify acceptance. In general terms, the following are the requirements of a valid offer:

  1. It must be unconditional.
  2. It must be done in the right place.
  3. They must conform to the terms of the obligation.
  4. It must be done at the right time.
  5. It must be done in the proper way.
  6. The person making the bid must be able and willing to fulfil their obligation.
  7. There must be a reasonable opportunity for inspection.
  8. The tender must be made to the right person.
  9. It must be of the total amount.

The above-mentioned points are discussed in detail below:

It must be unconditional

It is the essence of a valid offer that it must be unconditional. If the offer is accompanied by a condition that prevents it from being perfect or complete in itself, it cannot be considered as an equivalent payment and the promisee is not obliged to accept it and in a Lahore case, the plaintiff sent a single check for two items, only one of which was due at that time and the other was not due for a few years. He argued that the check that is one and indivisible can be accepted as a whole or not at all. It is clear, therefore, that for this reason, the bidding was not unconditional and the defendants had the right to reject it. 

But an offer of money is not tainted simply by asking for a receipt. Neither a tender made under protest is bad in law. An offer is not conditioned by the mere fact that the debtor specifies the account in which the money is paid. A check until the cash is not a good offer in the absence of an agreement to that effect.

One of the requirements of a valid offer is that the party making the offer must always be ready to fulfil the obligation when requested; or, in other words, an offer to be valid must be maintained in good condition, in accordance with the requirements of law.

In the case of  Steel engineering works Agrico (M / s.), Bishramur v. Southeast field ltd.., clause 23(a)(V) of the N.IT. clearly states that the Joint Venture Agreements (JV Agreements) must meet the requirements contained in subclauses (i) to (x) of clause 23(a)(V) of the respondents in the previous clause that the Joint Venture Agreement, which is presented together with the technical offer, must legally bind all the partners and, individually, for the purposes of the proposed agreement. It should establish principles for constitution/operation/ responsibilities with respect to work and financial agreements, participation (percentage in total) and joint and several responsibilities with respect to each and every one of the firms in the Joint Venture, while. 

Clause 8 of the joint venture agreement submitted by the petitioner states responds to the previous clause “that the Joint Venture Agreement binds the parties jointly and severally to the proposed agreement, which must establish the principles of the constitution, operation, responsibilities with respect to work and “Participation in financial agreements and responsibilities (only for the first part), with respect to each and every one of the companies in the joint venture.” 

Given that the liabilities were declared as property of the first part, only the JV Agreement was not found correct and the previous decision was made The difference between the requirement of “joint and several liabilities” and the “first-party liability” are two different things and no substitute can be presumed to the other, if the requirement of the NIT was the agreement that bound all the parties jointly and separately, the declaration of the res The ability to be owned by a single party, therefore, would not meet the bidding requirement.

The bidding authority is required first to decide who are the people who satisfy the essential mandatory conditions that are the criteria of rotation and the criteria of experience and then only perform the evaluation of offers with reference to other parameters. In this case, it was not done. 

Although the bidding committee treated the rotation criteria as one of the three mandatory conditions, the experience criteria were treated as “other qualification conditions”. This in itself amounts to a bad direction in the law. It is not denied before the Superior Court that of the eight tenders received, one of the tenderers meets the prerequisites for eligibility under general conditions, that is, the experience in the management of canteens in the state and government establishments of Bhavans. 

The entire exercise, therefore, suffers from this incurable defect in the decision-making process. There is no doubt that the petitioner in itself does not satisfy this condition, but the petitioner, the second respondent, and others were offered a relaxation of this condition and also with respect to a special condition that is only a “desirable” criterion. 

The notice published in the newspapers never indicated that the government would grant the relaxation of the general and special conditions. If only such a condition were reported, there would have been better people/organizations with better qualifications who could have submitted an offer for the contract.

In Ramana Dayaram Shetty c. Authority of International Airports, the Supreme Court considered such aspect of the matter and, although it did not grant any relief to the appellant and did not invalidate the contract granted to the fourth respondent, nevertheless, it found fault in the procedure adopted the bidding authority. For the same reasons, the Superior Court could not approve the method adopted by the first respondent or the bid committee to grant a relaxation of the prior eligibility condition that all bidders must meet.

It must be made at the proper place

The tender must be made in the place stipulated in the compliance contract, or if a provision is not made, then in the place determined by law. There are special rules regarding negotiable paper, with respect to the transfer of personal property, and with respect to the payment of rent by a real estate tenant, but apart from these special rules, the general principle of customary law is that the debtor must search for the creditor and make offers wherever it is found, and even without reference to this principle, the place of residence of the creditor at the time the contract was made will often be considered by a just implication of fact, the place of contract. 

In bilateral contracts, each party is both a debtor and a creditor, and when the return is due at the same time from each one, it follows that any of the parties wishing to put the other in default must seek to do so. an offer, unless the contract, custom or the rule of law prescribes a place where both actions are performed.

It must conform to the terms of the obligation

The offer must conform to the terms of the obligation. The offer must be made in a complete and early manner exactly how the promisor has accepted. The matter can be initiated by Karsale (Harrow) Ltd v. Wallis, where the defendant inspected a Buick car that subsequently wanted to sell and found that it was in excellent condition. Subsequently, the defendant signed a contract of purchase and contracting with respect to C. 

The agreement contained an exception clause that included the following terms: 

  1. There is no condition or guarantee that the vehicle is fit to move or in terms of its age, condition or suitability for any purpose. 
  2. The owner in this document stated that after the date of the agreement, the car was left at night outside the premises of the defendant and in the inspection by the defendant the next morning it was found that he was in a deplorable condition and capable of self-propulsion. 

It was held that the car delivered was not the contracted object. Denning, L.J, said the lender should know, in the ordinary course of business, that the lessee is based on the faith of his inspection and on the understanding that the car will be delivered substantially under the same conditions: and it is an implied term of the contract that is pending delivery the automobile will be kept in the proper order and will be repaired for the purpose of the rescue … exemption clauses of this type, no matter how widely they are expressed, only make use of the part when he is carrying out his contract in all essential aspects.

You are not allowed to use them as a cover for misconduct or indifference or to allow you to turn a blind eye to your obligations. They do not take advantage of it when they are guilty of an infraction that goes to the root of the contract. Sometimes it is said that the principle is that the party cannot depend on an exemption clause when it delivers something different in its contracted class or has broken a ‘fundamental term’ or a fundamental contractual obligation.

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It can be affirmed that the offer must be of the totality of the debt, the quantity of the merchandise to be supplied, neither more nor less, and in accordance with the contracted specification. Although the amount owed is uncertain or the disputed payment of any amount agreed between the parties is a satisfaction of the liability. 

When a settled amount is owed, the payment of a lesser amount cannot be like the satisfaction of the whole debt, unless there is a consideration the waiver of the balance or the circumstances are such that the creditor cannot take advantage of the absence of consideration.

However, bidding made as a basis for a concurrent right of exchange of the party to which the bidding is made may be conditioned to the execution by the letter of its obligation. But an offer of the fulfilment of an absolute obligation must be unconditional since the obligation in itself is conditional. The offer cannot be effective if its acceptance would harm the rights of the promise. 

However, a promoter may, by making an absolute offer, protest that the performance claimed by the promise and that granted by him is excessive and indicates that his performance offer is not voluntary and, therefore, reserves the right to recover for your excessive performance.

It must be made at a proper time

The tender must be made in a timely manner. Therefore, it has been argued that an offer of debt before the due date is not an impediment and will not prevent interest from accruing on the debt.

In the present case, it is not disputed that, once the sealed bids were opened, it was determined that the fifth respondent was the selected bidder, and only after that, the petitioner approached the court in writing with this petition.

Just because there was a violation of the schedule mentioned in the notification notice, the appellate court should not interfere in the matter, when the petitioner has not demonstrated that for the violation in question, he suffered actual harm in any way.

It must be made in the proper form

To be valid, the tender must be in the proper form. The payment must be offered in what is called “legal tender”, in the currency of the country or in the currency of the tickets. An insured coverage cannot be legally offered by him treated as legal tender. I have tried it as legal tender. By offering to verify or offer any item of value, even if that item has a value greater than that of the debt, the debtor cannot claim to have offered to pay the debt. The creditor was not required to accept the insured’s coverage simply because he was insured for a sum greater than the debt.

A mortgage to ensure a given number of wealth marks is a mortgage to secure reimbursement of what may be a legal tender currency for reimbursement in the country where Reichsmark circulates. 

The debtor must not request a change but must have the exact amount owed, unless he is willing to leave the surplus with the creditor. When the offer made by the tenant does not correspond to the total amount owed and the name of the sender is not disclosed. the offer is adequate an offer by means of a check or a voucher is not required unless the other party accepts it or has requested payment by check. In general, the payment of the money by check or voucher does not have to be a valid offer and it can be received subject to be subsequently honoured by the bank or the treasury. 

But when the coupon was charged, but because of the error in the endorsement due to the lack of attention by the plaintiff (the creditor), it has been accepted by the creditor and presented to the treasury.

He argued that there was a legal course. When a check was delivered but returned due to insufficiency, and then it was determined that the amount of the street was deemed to be good. The defendants were the creditors of a company in Mauritius and, to pay certain creditors of Mauritius, including the plaintiffs, the defendants sent hawalas that were a form of sinking, to eight of their creditors in Mauritius and, at the same time, They sent a letter to the company informing them that these hawalas have been sent to meet with them in the presentation. 

But the creditor for his pains or for his own reasons did not present it for payment until the person to whom the hawala was delivered became insolvent. It was argued that the hawala operated as the satisfaction of the debt and that the creditor should be treated as if he had had the hawala in satisfaction of the debt and could not be allowed to recover the amount through a lawsuit.”

A mere publication offers to pay the amount owed or to execute a document is not valid for a performance offer. In the same way, an offer made by a promisor through his lawyer to pay a debt with interest due has been maintained with a valid offer. When it was not urged that the beneficiary accept to accept the payment to the third party as equivalent to the payment to himself, it was that there was no type of suitable offer.

In fact, the sworn statement with the tender is an affidavit printed in format (Format 2-8), in which the bidder must mention that it is not included in the blacklist by any government/organization/ semi-governmental corporation of any state and/or disabled by the Punjab PWD department (B and R). There is no other format of the affidavit in terms of Clause 4.5 of General Conditions that have been invoked by the petitioner.

If the affidavit had been drafted and the defendants No. 5 had been suppressed or avoided to disclose the information required in the affidavit, it could certainly have been a suppression case and suggest to be false, but since the department did not respond to that requirement, 5 was not required to provide the information mentioned by the petitioner in the written request.

Therefore, it cannot be said that the defendant has made a misleading or false representation in the forms presented by him. In addition, it is not clear in Clause 4.5 of the General Conditions if the breach is related to the department in question or could be with respect to any other Department / Semi-governmental Organization or the State.

Ability and willingness

Another essential requirement of a valid offer is that it must be done in such circumstances so that the person to whom it is made can have a reasonable opportunity to make sure that the person by whom it is done can and is willing to do so and there is the whole. of what he is bound by his promise to do. An offer made by a promisor through his attorney to pay a debt with interest due on the date of the offer does not by itself provide a reasonable opportunity to promise to verify that the promisor can and is willing to fulfil its promise. Where it happens that the promisor and the fiancé live on the same street is not a circumstance that can take the case to the scope of that section promise.

The promoter cannot reasonably expect the fiancé to attend the residence or the promoter’s place of business in order to ensure that the promoter can and is willing to carry out the offer he has made. The debtor is not obliged to take the risk of offering a payment to a person whose right to receive the debt may be non-existent. If you take a risk, it is difficult to understand why the offer you make should not be subject to the same conditions that you would have had to meet if you had made the original promise.

However, ready and willing to pay a party may have been a tender in the law, unless there is, after the offer outside the Court the unconditional deposit in the Court of the money owed. In the present case, it is evident that the petitioner’s offer, although it was the highest and that was also called to negotiate by the RFC, finally, it never culminated in the final acceptance since the offer of the petitioner was conditional and did not accept the terms and conditions. On the contrary, the bidding notice in its entirety, despite being the highest bidder, established its own terms and conditions that were within the competence, power, and option of the respondent-RFC to accept or reject it .

Therefore, it must be inferred that no contract has been created between the defendant and the petitioner, since the petitioner limited himself to making an offer and that was conditional in response to the defendant’s RFC tender notice and the terms and conditions established by the petitioner had not been accepted in full by the RPC since a letter of acceptance of their offer had not been issued.

When the creditor has died and the executors of the deceased have not obtained a succession, an offer by letter to pay the debt owed to the executors, in the event that the appropriate release is executed, a valid offer will be made as long as the debtor has been able to pay the debt. Debt and had money available for that purpose. The actual production of money is not necessary in such a case since there is no one with the right to receive payment in the law. 

In a later case, the High Court of Calcutta has now established that whenever a creditor dies, the debtor is in an unfortunate position, he must take the risk of submitting an offer to a person who is now entitled to receive the debt, and The subsequent claim by the executor or administrator of the deceased creditors or he must wait until someone obtains the letters of testamentary administration and incur the responsibility of paying additional interest in the meantime.

Regarding the need for strict compliance with the conditions that entitle a party to a relief of the repurchase production of a transaction, it was held that strict compliance would be deducted by the claimant from the amounts of consideration, but the conduct to be the creditor can be equivalent to a dispensation With the literal complaint of them, a notice is sent to him so that he does not send more products. similarly, in the case of a future share delivery contract, if the buyer before the expiration date notifies the seller that he will not accept the shares, the latter need not show that he was ready and willing to deliver the shares.

A reasonable opportunity for inspection

The seller is obliged to ask the buyer for a reasonable opportunity to examine the goods in order to determine if they are in accordance with the contract. The interested party could not make an inspection of the goods that do not comply with the requirements of the law. However, there is no authority for the proposition that a buyer has the right to continue inspecting and examining until the expiration of the delivery period. 

The law or thing that is offered is the thing that the promoter of the delivery. the law only requires that the fiancé has a reasonable opportunity to see what the promise of opportunity to fulfil is. The normal place of inspection is the place of delivery. The promisor has no obligation to prove the identity of the thing offered to promise satisfaction. The promoter does not have the obligation to take the delivery measures. The promisor is just giving him a chance.

Tender must be to the proper person

An offer to be effective must be made to the right person. At first glance, it is the fiancé who can demand payment and deliver a valid receipt, even though he may have been hired for the benefit of others. In a previous Bombay case, 11 where the debtor was ready with the full amount, but the executors of the deceased creditor did not take steps to obtain the succession, in order to give a valid acceptance, it was held that there had been an adequate tender. 

In a later case, the High Court of Calcutta expressed the view that a debtor must submit an offer to a legally constituted representative or risk submitting an offer to a person who is not entitled to receive the debt and a subsequent claim of the executor or administrator or wait until someone obtains the estate or management letters and incurs the responsibility to pay additional interest in the meantime.

According to the notice of the Supreme Court of Madras of the disposition and willingness to pay given to a person interested in the estate of a deceased, it is an adequate tender. In the case of joint promises, an offer for one of them is a good offer. The heirs of a single fiancé are, for the purpose of bidding, considered joint promises with the result that the bidding of one of them would meet the requirements of the law. If an offer is made to the heirs of a fiancé, it must be in the same conditions as those in which it could be made to the original fiancé.

Tender must be of the full amount

The offer must be of the total amount owed. An offer obstructed with the equipment that the money should be taken as an agreement is not valid. 

Conclusion

A tender may be considered as an open contract whomsoever wishes to fulfil the obligations of the tender may enter into the contract directly or indirectly and get the royalty or payment for the same. Every tender is accompanied by a quoted value and the acceptor or the contractor may get paid over or under or exactly that quoted value upon fulfilling contractual conditions of the tender.

Even all the countries’ money is called legal tender as the leader of the country or the national bank of the country promises to pay the bearer the indicated sum of money upon demand. All tenders are legally binding on both parties and can be enforced in a court of law. Tenders help the parties to execute long term contracts smoothly and soundly. Larger tenders may into sub tenders by the contractor or may consist of more than one contractor for the easier and faster execution of the tender.

Reference

  1. Law of contract M.J. Aslam’s.
  2. The law of contracts and tenders T.S. Venkatesa Iyer.
  3. Contract and specific relief Avtar Singh.
  4. Law relating to contract act of 1872, and tenders Sanjiva row.

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