Contract A and Contract B of construction projects

Contract A and Contract B are two legal concepts that apply to the tendering process in construction law in Canada. They were first introduced by the Supreme Court of Canada in the landmark case of Ontario v. Ron Engineering & Construction (Eastern) Ltd. in 1981. Since then, they have been widely adopted and applied by courts across the country to regulate the rights and obligations of parties involved in bidding and tendering.

Contract A: General Contract for the Construction of Buildings

Contract A is the contract that is formed between the owner (or the procuring authority) and each bidder who submits a compliant bid in response to an invitation to tender (or a similar document). Contract A consists of the terms and conditions of the tendering process, such as the deadline, the evaluation criteria, the privilege clause, and the bid security. Contract A is binding on both parties as soon as a bid is submitted, regardless of whether the bid is accepted or not

Contract B is the contract that is formed between the owner and the successful bidder who is awarded the contract to perform the work. Contract B consists of the terms and conditions of the performance contract, such as the scope, the price, the schedule, and the warranty. Contract B is binding on both parties only when the owner accepts the bid and issues a notice of award or a letter of intent.

The main purpose of Contract A and Contract B is to ensure fairness, transparency, and certainty in the tendering process. They also aim to protect the legitimate expectations and interests of both owners and bidders. However, they also pose some challenges and risks for both parties, such as the duty of good faith, the liability for breach, and the availability of remedies. Therefore, it is important for owners and bidders to understand the implications and consequences of Contract A and Contract B, and to seek legal advice before entering into or challenging them