A recent decision of the British Columbia Supreme Court has confirmed that the carrying of a trade contractor’s quote by a general contractor can have legal consequences for both.
Legal Reinforcement | Norm Streu and Chris Hirst
A recent decision of the British Columbia Supreme Court has confirmed that the carrying of a trade contractor's quote by a general contractor can have legal consequences for both.
In Civil Construction Co. Ltd. v. Advanced Steel Structures Inc., Civil Construction submitted a bid to the City of Richmond.
A component of that bid was for structural steel work for the project.
Advanced Steel Structures made an unsolicited quote to Civil Construction for the structural steel components of that bid.
The unsolicited quote identified the project, specified the structural plans and stated a lump sum total.
A note at the bottom of the quote indicated that the price was valid for acceptance for 30 days.
Civil Construction carried Advanced’s quote in its own ultimately successful bid to the city.
When notified by the city that it had been awarded the contract, Civil Construction advised its trades, including Advanced, that it was the successful bidder for the project and that they had all been named in the bid.
Advanced received notice of the award within 30 days, but immediately responded that it was considering the withdrawal of its quote because its price was too low.
Upon receipt of the subcontract from Civil Construction outside of the 30 days stated in its quote, Advanced refused to execute it and took the position that Civil Construction had not accepted its price within the time stated and, furthermore, that the scope of work outlined in the subcontract was outside of that described in its quote.
Civil Construction accepted Advanced’s repudiation of the subcontract, proceeded with an alternate subcontractor and brought a successful action in Supreme Court seeking compensation for the difference between Advanced’s quoted price and what Civil Construction paid the alternate subcontractor.
The court found that a bid contract, known as Contract A, came into existence between Civil Construction and Advanced, when Civil Construction carried Advanced’s bid in its tender to the city.
As a result, the bid contract had already crystallized by the time that Civil Construction issued the formal letter of award to Advanced.
Accordingly, neither the notice of award, nor the tendering of the subcontract, was outside the 30 day period specified in the quote.
The court further found that while Civil Construction could not force Advanced to sign a construction contract beyond the scope of its quote, Advanced had a duty to enter into a construction contract, known as Contract B, with Civil Construction, which reflected the original scope of work.
Once Advanced refused to enter into Contract B, it breached Contract A and that breach entitled Civil Construction to damages calculated as the difference between Advanced’s original quote and what Civil Construction ultimately paid to another trade to undertake the work.
Trades should keep this decision in mind when providing quotes that may be carried in a general contractor’s bid.
A court may well subsequently find that the carrying of that quote will also carry legal obligations for both the general contractor and the trade.
Norm Streu is the president & chief operating officer of the LMS Reinforcing Steel Group and former chair of the Vancouver Regional Construction Association. Chris Hirst is a partner and the leader of the Construction & Engineering Group, Alexander Holburn Beaudin & Lang LLP. This article was prepared with the assistance of Thea Hoogstraten, articled student.
Chris Hirst
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