Australia: Contracts: When can a tender price be changed after the closing date?

Last Updated: 15 March 2010
Article by Scott Alden and Alyson Eather

Basic contractual principles provide that in order to have an offer capable of immediate acceptance there must be certainty of price. As a result, in a traditional tender process, price is an essential element of the tender. If an error is discovered after submission however, to what extent can a tender price be altered?

Often pricing schedules are complicated and in cases of fixed lump sum contracts, there can be many elements which make up the final price. With complicated pricing structures, it is not uncommon for there to be errors in the pricing information submitted which can impact (both positively and negatively) on the final lump sum price.

An issue that is often faced by owners is the extent to which corrections can be made to pricing schedules following the close of tenders when such errors are discovered. In Australia, as in other common law jurisdictions, the equitable doctrine of rectification may, subject to the tender conditions, permit a very limited amount of amendment in the face of a unilateral mistake in a submitted tender, for example, in the case of a clerical transcription or arithmetical error.

The recent Canadian case of Maystar General Contractors Inc v Newmarket (Town), 2009, ONCA 675 is an interesting exploration of the difference between a unilateral pricing mistake that is capable of rectification and one that is so fundamental that the tender is too uncertain for it to be accepted.

The facts

The town of Newmarket Ontario (the Town) issued a select tender to four pre-qualified contractors for the construction of a new recreational facility. Tenders were received from, amongst others, Maystar General Contractors Inc (Maystar) and Bondfield Construction Company (Bondfield).

At tender opening1, the Maystar tender was recorded as the lowest priced.

During tender evaluation2 it was noted by the tender evaluation committee that there was a discrepancy in the Bondfield bid price.

The price schedule in the invitation to tender document was constituted as follows:

stipulated price + GST amount = total cost of work.

Bondfield's pricing schedule was completed as follows:

Element of Price Amount
Stipulated price $33,000,528.00
GST $2,346,960.00*
Total cost of work $35,874,960.00^

* This amount was not 7% of the stipulated price but 7% of a transposed higher figure of $33,528,000.00

^ This figure is the sum of the GST and the transposed higher figure of $33,528,000.00

As a result of the issues outlined above, the 'stipulated price' and GST amount did not equal the 'total cost of work'. The evaluation committee took the view that Bondfield had made an arithmetic or clerical error in its bid form. The GST figure was then recalculated based on the stipulated price and this figure was then used to determine what the committee believed to be the correct total cost of work. As a result of these amendments to Bondfield's price it was recommended that Bondfield be considered the lowest priced tenderer on the basis that the stipulated price was correct and represented the lowest bid price received by the Town.

The evaluation committee made a recommendation to the Director of Parks, Recreation and Culture suggesting that the Town request written confirmation from Bondfield that their stipulated price was in fact the correct bid price. Despite initial reservations by the Manager of Purchasing and Office Services regarding awarding the tender to Bondfield because of the price uncertainty, Town staff agreed to recommend to the Town Council that it accept Bondfield's tender.

Following a meeting by the evaluation team, the Manager of Purchasing and Office Services received a message from Bondfield on the price discrepancy issue. This message was followed by a faxed letter indicating that an addition error had occurred following last minute changes to the base price which were not carried over to the GST calculation and that the total cost of work was therefore incorrect (the Bondfield letter). The letter requested that the Town evaluate the tender on the basis of the stipulated price, which was lower than the Maystar bid price.

Following the meeting and the receipt of the letter from Bondfield, 'Unofficial Tender Results' were circulated to all bidders which noted that, following correction of the Bondfield figures by the Town, Bondfield was now the lowest priced bidder. The Town determined that it could correct the mistake made by Bondfield on the basis of a previous decision of Bradscot3. In Bradscot the summary price information was not consistent with the main pricing schedule. In that case, the total bid price was clear on the face of the document, the summary pricing information was determined to be superfluous and subordinate and further it was evident that there was a transcription error.

Following a complaint by Maystar in relation to this correction, the Town convened a special meeting. The meeting agenda included a copy of a report which recommended the Bondfield bid for the corrected amount. A copy of the Bondfield letter was also attached to the report as was a copy of the Maystar complaint letter.

At the meeting, the Town Council considered the report and also heard from Maystar as to its concerns. The Town Council passed a motion approving the awarding of the contract to Bondfield for the stipulated price.

First Instance Decision

The right to rectify a mistake

Maystar brought a claim at first instance for a breach of the process contract. At first instance the Court found that Bondfield's bid price was too uncertain relying on the decision of Vachon Construction4. Vachon held that price is an essential element of a bid and that an offer that is uncertain as to price cannot form the basis of a binding contractual relationship. In the Court's view Bondfield committed two errors in its pricing schedule. The first was in the GST calculation, and the second in the total cost of work calculation. These two errors made it impossible from a review of the bid form to tell where the error lay. Evidence was brought of internal Town discussions between Town staff which reflect different opinions as to which line item in the bid price was accurate.

Unlike the Bradscot decision, on which the Town relied, the Court found that the pricing schedule in which the two errors were made by Bradfield were neither superfluous nor subordinate information.

The Court held that the error could not be rectified by a simple arithmetic recalculation. The Court further noted that the tender conditions provided that amendments to bids following the close of tenders should not be considered or accepted. As a result the Town's consideration of the Bondfield letter which contained a clarification and requested an amendment was in breach of the tender conditions and constituted a breach of the Town's duty of fairness.

The right to accept a non-compliant tender

The Town argued that the tender conditions allowed it to accept a non-compliant tender. Specifically it relied on the following tender condition to support its position:

'The bidder acknowledges that the Owner may rely upon criteria, which the Owner deems relevant, even though such criteria may not have been disclosed to the Bidder. By submitting a Bid, the Bidder acknowledges the Owner's right under this Section and absolutely waives any right or cause of action against the Owner and its consultants by reason of the Owner's failure to accept the Bid by the Bidder whether such right or cause of action arising in contract, negligence, or otherwise.'

At first instance, the Court found that in the absence of clear and straightforward language in the tender conditions, an owner cannot accept a non-compliant bid, and that such language was not present in the Town's tender conditions.

As a result of the uncertain price, and on the basis that the tender conditions did not provide for the Town's acceptance of a non-compliant tender, the tender was not compliant and the Court at first instance determined that the Town should not have accepted the Bondfield bid. Maystar's application was therefore upheld.

The Appeal

On appeal the critical issues for the Court were:

  • Was the bid price sufficiently certain such that the Bondfield tender was a compliant tender capable of acceptance?
  • If the tender was deemed non-compliant, did the tender conditions permit the acceptance of a non-compliant bid?

Was the bid price sufficiently certain?

The appeal court found that the bid price was not sufficiently certain. On the face of the document, it was not possible to determine whether the stipulated price or the total cost of work was correct. The Court concurred with the first instance decision that this was not the same factual scenario as that in Bradscot. In Bradscot, unlike in this case, only a notional correction was made. Further, the Court determined that the Town had relied on the Bondfield letter to determine the price on which to base its decision.

As a result, the price was not sufficiently certain and the Court found that the Bondfield tender should have been declared non-compliant for failing to contain a certain price. Did the tender conditions allow the acceptance of a noncompliantbid?

The Town submitted that certain provisions in the tender conditions allowed the Town to accept Bondfield's noncompliant bid and that these provisions were not given due weight or accord by the Court at first instance.

The Town contended that the provisions allowed it to check all arithmetical extensions to ensure that they were correct, waive any discrepancies, errors or other defects or deficiencies in the tender schedules and determine whether a bid was substantially compliant and accept an unbalanced, irregular or informal bid.

The Court of Appeal found that the trial judge had considered the effect of the tender conditions. The Court found that the discrepancy in the Bondfield tender, and consequent uncertainty in the bid price, constituted a fundamental error that was not able to be unilaterally corrected or waived using any provision of the tenderconditions. It required an amendment to the tender to make all pricing information consistent with the stipulated price and in accordance with Bondfield's post closing date correspondence that identified the error and explained its intent. Acceptance of such amendment was specifically prohibited by the tender conditions.

The Court dismissed the Town's appeal with costs.


This case is an interesting exploration of the boundaries to the equitable doctrine of rectification in cases of unilateral mistake. It highlights the difference between correcting a clerical or arithmetical pricing error, which may be allowed, and a fundamental error which makes an offer so uncertain it is not capable of acceptance.

For those drafting invitation to tender documents, it serves as a useful reminder that tender conditions or bidding rules must be reviewed and drafted to ensure that they giveowners the widest discretion possible to accept compliant, non-compliant or substantially compliant bids in order to ensure that a value for money outcome can be achieved.

For tenderers this case is an important reminder to ensure that pricing information is correct at the time of submission, as it is likely that correction following the closing date will only be permitted in limited circumstances, if at all.

1. In accordance with the relevant tender opening procedures, tenders were opened in public and the bid prices were announced at that time.
2. It can be assumed from the facts presented in the judgment that the tender was to be awarded to the lowest priced tenderer, subject to a satisfactory commercial and technical response
3. (MCL) Ltd. v. Hamilton-Wentworth Catholic District Board (1999), 42 0.r. (3d) 723 (C.A.)
4. Ltd. v Cariboo (Regional District) [1996] B.C.J. No. 1409 (C.A.)

© DLA Phillips Fox

DLA Phillips Fox is one of the largest legal firms in Australasia and a member of DLA Piper Group, an alliance of independent legal practices. It is a separate and distinct legal entity. For more information visit

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.