The terms Contract A and Contract B in

Canadian contract law Canadian contract law is composed of two parallel systems: a common law framework outside Québec and a Civil law (legal system), civil law framework within Québec. Outside Québec, Canadian contract law is derived from English contract law, tho ...

refer to a concept applied by the Canadian courts regarding the fair and equal treatment of bidders in a contract tendering process, for example to award a

construction Construction are processes involved in delivering buildings, infrastructure, industrial facilities, and associated activities through to the end of their life. It typically starts with planning, financing, and design that continues until the a ...

contract. Essentially this concept formalizes previously applied precedents and strengthens the protection afforded to those who submit bids in the tendering process. The concept was introduced in 1981 by the

Supreme Court of Canada The Supreme Court of Canada (SCC; , ) is the highest court in the judicial system of Canada. It comprises nine justices, whose decisions are the ultimate application of Canadian law, and grants permission to between 40 and 75 litigants eac ...

, in '' R. v. Ron Engineering and Construction (Eastern) Ltd''. The court found that a "

duty of fairness A duty (from "due" meaning "that which is owing"; , past participle of ; , whence "debt") is a commitment or expectation to perform some action in general or if certain circumstances arise. A duty may arise from a system of ethics or morality, e ...

" was owed to all bidders by an owner in a tendering process. Supreme court of Canada in summer

A Contract A, a "process contract", is formed between the owner (person, company or organization tendering the project) and each bidder when a "request for proposal" is responded to in the form of a compliant bid, sometimes also known as submission of price. The owner must deal fairly and equally with all bidders, and must not show any favouritism or

prejudice Prejudice can be an affect (psychology), affective feeling towards a person based on their perceived In-group and out-group, social group membership. The word is often used to refer to a preconceived (usually unfavourable) evaluation or classifi ...

towards any bidder(s). In essence, this concept boils down to the right of an individual to have equal opportunity to be successful with their bid for work. A Contract B is formed when an owner formally accepts a bid or, colloquially, a submission of price. Only a single Contract B is formed between, the owner and the successful bidder. The term "Contract B" is used to differentiate the actual construction contract from the tender contract or "Contract A". Tied to the concept of "Contract A", Contract B is a place holder in the concept, a marker at the end of a formalized process of equitable treatment of both bidders and owners.Paul Emanuelli, ''Government Procurement'', Fourth Edition, p. 125, Published by Lexis Nexis Canada, Year of Publication: 2017, A breach of Contract A may occur if the owner (or an owner's officer or representative, see

vicarious liability Vicarious liability is a form of a strict, secondary liability that arises under the common law doctrine of agency, '' respondeat superior'', the responsibility of the superior for the acts of their subordinate or, in a broader sense, the r ...

), provides information, changes specification during the tendering process to unfairly benefit a particular bidder, enters into closed negotiations with an individual bidder in an effort to obtain more desirable contract conditions, etc. The most common situation in which an owner is accused of having breached Contract A occurs when a bidder is selected who is not the lowest bidder. This contravenes established custom and practice, which would normally dictate that the lowest bidder be awarded the subsequent contract to perform the work,

Contract B The terms Contract A and Contract B in Canadian contract law refer to a concept applied by the Canadian courts regarding the fair and equal treatment of bidders in a contract tendering process, for example to award a construction contract. Essent ...

, but is not normally a source of a breach if handled properly. The successful suits for breach typically occur if the lowest bidder has been excluded based on a stipulation not clearly outlined in the tender documents (such as preference for local bidders) or when the

Privilege Clause Privilege may refer to: Arts and entertainment * ''Privilege'' (film), a 1967 film directed by Peter Watkins * ''Privilege'' (Ivor Cutler album), 1983 * ''Privilege'' (Television Personalities album), 1990 * '' Privilege (Abridged)'', an al ...

employed by the owner to exclude a principle of custom and practice is judged by the courts to be too broadly worded to have any meaning.

References

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