Suppose you have this scenario:

Company AA is an automotive manufacturer that needs to upgrade the IT system that lasted for 10 years. It asked the same supplier of old IT system to provide a feasibility study on how the system could be improved in terms of speed and efficiency. Company AA recevied a report that the system can be upgraded. Then, Company AA issued a formal invitation to tender for the work involved on the basis of Company AA 'Standard Terms for IT Services'. The supplier produced a tender with detailed information like cost and duration, however the tender made several modifications to Company's standard contract terms for IT services.

Then, A formal notification of contract award was issued by company AA to the contractor, but ignored the Clauses modifications and included a reference to the original standard terms of contract for IT services.

The contractor did not agree with the original terms, so refused the contract award. Is the contractor obligated to start working on the project as they have reached the contract award stage. In other words, is there any legal obligations or can a contract award can be resufed if the contactor did not agree on terms ?

P.S following common law in US & UK

1 Answer 1


There is no contract

One of the requirements for a contract to exist is agreement between the parties - there is no agreement here.

Here is what happened:

  1. AA asked for IT to make an offer subject to standard terms.
  2. IT made an offer subject to different terms.
  3. AA rejected IT's offer and made a counter-offer on the original terms.
  4. IT rejected the counter-offer.

Since no one has accepted any offer, there is no agreement and no contract. Also, the rejection of an offer (by counter-offer or directly) kills the offer so, right now, there are no live offers that could be accepted to form a contract, for example, AA cannot now accept IT’s original offer.

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