The City of Salisbury places the following invitation for tenders on the South Australian Government Tenders

Question 1      (20 marks) Part A

The City of Salisbury places the following invitation for tenders on the South Australian Government Tenders & Contracts website:

Community Building - Salisbury Swimming Pool

The City of Salisbury invites organisations (‘Tenderers’) to submit tenders for the project described in this Request for Tender (‘RFT’). In partnership with the construction industry, the City of Salisbury strives for excellence in the delivery of its projects to the South Australian community.

Request for Tender LW 15/2023 - Community Building - Salisbury Swimming Pool.

Council requires submissions for the demolition of an existing building and construction of a new Swimming Pool Utilities Room, Changeroom, Lifeguard Tower and Cafe as part of the Salisbury Swimming Pool - Lot 5 Samsung Street, Salisbury.

All submissions must be lodged via the SA Tenders and Contracts website by 5pm Wednesday 31 April 2023.

In response to this invitation, Built Construction Pty Ltd (Built) lodges a fixed price lump sum tender of $2.5 million at 4.40pm on 31 April 2023. Built’s tender contains the following conditions:

Conditions:

This tender is valid to 5pm on 29 June 2023. Acceptance to be in writing by post sent to our head office address.

Public liability insurance will be provided to the value of Ten (10) million dollars.

Contract security will be provided in the form of an unconditional bank guarantee to the value of 5% of the contract sum.

Built’s liability for any damages in connection with the contract is to exclude liability for consequential losses.

Four weeks after Built submits its tender, a second wave of COVID-19 cases occurs in South Australia which leads to the SA Government announcing a lock-down period of 10 days. Concerned about the uncertainty that the second wave could cause in the construction labour and materials supply chains, Built sends a letter by registered mail to the City of Salisbury on 28 May 2023 stating:

This letter arrives at the City of Salisbury’s offices on 30 May 2023. On 29 May 2023, the City of Salisbury mails a letter to Built stating:

The City of Salisbury’s letter arrives at Built’s head office on 1 June 2023.

Advise whether a contract has indeed been formed between Built and the City of Salisbury for the carrying out of the works for the Salisbury Swimming Pool.

Note: Your answer should consider and identify all relevant events (e.g. invitations to treat, offers, counter-offers, revocations, acceptances etc.) and dates.

Part B

Some three weeks later after the lockdown period has ended, COVID-19 cases are contained, the threat to public health subsides and social distancing restrictions relax. Built now wants to reinstate the deal to carry out the works at the Salisbury Swimming Pool. On 25 June 2023, Built sends an email (to the email address designated by the City of Salisbury) which states:

Due to the disruption caused by the recent lockdown, however, the email was not read by a City of Salisbury employee until 28 June 2023.

On 27 June 2023, the City of Salisbury had entered into a contract for the lump sum price of

$2.58 million with ProGreen Construct Pty Ltd to carry out works for the demolition of existing building and construction of a new Community Building as part of the Salisbury Swimming Pool.

On 29 June 2023, the City of Salisbury emails Built to inform them that the contract has already been awarded to another contractor.

Built asserts the City of Salisbury is in breach of contract and threatens to take legal action.

Advise whether a contract has indeed been formed between Built and the City of Salisbury for the carrying out of the works for the Salisbury Swimming Pool and, if so, whether there has been a breach of this contract by the City of Salisbury.

Note: Your answer should consider and identify all relevant events (e.g. invitations to treat, offers, counter-offers, revocations, acceptances etc.) and dates. You should ensure your answer refers to relevant provisions of the Electronic Communications Act 2000 (SA).