Court of Appeal weighs in on tender law

A recent decision of the Ontario Court of Appeal interpreted the exculpatory clause contained in the Ministry of Transportation's request for tender as a complete defence to the claim for damages made by an unsuccessful bidder.

In the case of Rankin Construction Inc. v. Ontario, Rankin Consruction submitted the lowest bid in response to a request for tender issued by the Ministry of Transportation. The Ministry rejected Rankin's bid as non-compliant and awarded the contract to the second lowest bidder. Rankin proceeded to sue the Ministry for lost profit but thier action was dismissed by the Superior Court of Ontario. Rankin appealed the decision to the Court of Appeal which upheld the lower court's decision. Of significance, the Court of Appeal interpreted the exculpatory clause contained in the Ministry's invitation to tender as constituting a complete defence to Rankin's action.