<\/p>\n
The main aim of this paper will be demonstrate steps needed to creation of the contract into the company. The general rule at common law is that the invitation to tender can be defined as an invitation to negotiate, not an offer (Spencer v. Harding (1870) LR 5 CP 561). The invitation should be presented in clear and orderly way and addressed to a small number of interested parties.<\/p>\n
According to our case study, the project manager of \u2018Company Ltd\u2019, who is involved in contract negotiation for a major industrial project, is responsible for involving the contractors, who will be supplying the company with hardware and software. The company is looking for the best offer from suppliers, who will be able to meet their mandatory requirements.<\/p>\n
Appendix below presents Invitation for Tender for the provision of hardware and software at \u2018Company Ltd\u2019.<\/p>\n
Company Ltd<\/p>\n
Dear Sir \/Madams<\/p>\n
\u2018Company Ltd\u2019 would like to invite companies to a tender for a supply with hardware and software for a major industrial project, with budget of \u00a3100 million GBP. The established amount will be paid in two instalments.<\/p>\n
The vendor is required to provide high quality products with an efficient and cost-effective solution to our business. The tender should include following hardware and software:<\/p>\n
The most up-to-date hardware: Development PCs – Intel\u00aeCore\u2122i7 processor based systems, 4 with NV460 graphics cards + 1 with IGPA 4.0 + additional equipment<\/p>\n
A diverse range of the popular software, including: Microsoft Windows XP, Vista 7, Microsoft Office 2010, Microsoft Visual Studio 2010, Adobe Creative Suites 5, Firefox.<\/p>\n
The evaluation process will be carried out to assure that bids are fairly appraised to ascertain those that represent best overall value and the highest expected quality of output during the contract.<\/p>\n
Contractors should complete and submit two copies of the tender documents by post and one copy via e-mail, showing how they would meet the requirements.<\/p>\n
The tender should be submitted by 16:00 pm on 20th May 2011. All queries regarding particular aspects of the tender should be submitted via e-mail to the addresses shown below by 15th May 2011 and directed to:<\/p>\n
Name: Project Manager<\/p>\n
Email:<\/p>\n
Vendors should note that \u2018Company Ltd\u2019 will commence the contract on 12th June .<\/p>\n
\u2018Company Ltd\u2019 reserves the right to clarify with the vendor regarding any aspects arising from this Invitation to Tender after the tender submissions have been received.<\/p>\n
Signature………………………………….. Data…………………………………..<\/p>\n
To enable business to take place in an international marketplace, contract law has to be fairly straightforward.<\/p>\n
Contract is part of every operation which is intended to create the legal relationship. It is the binding agreement by two or more legally competent parties that had enforced by the law. Formation of a contract is written at the paper undersigned and agreed by those responsible people.<\/p>\n
There are three fundamental requirements necessary for a contract to be valid:<\/p>\n
An agreement which consists of an offer and its acceptance<\/p>\n
Consideration which is something bargained for and given in exchange for a promise<\/p>\n
An intention to create legal relations<\/p>\n
In general, a contract will exist when an agreement is made by acceptance of an offer.<\/p>\n
The offer is a first, important element of a binding a contract because it plays significant role for both of parties. It can be defined as \u2018a clear statement of the forms on which one party (the offeror) is prepared to do business with another party (the offeree). [1<\/a>]<\/span> An offer can be bilateral or unilateral.<\/p>\n Most offers are bilateral, what is means that a contract can be made between two parties whereby the offeree promises to buy and the offeror agrees to sell and supply goods of a proper standard. However, a unilateral offer is \u2018a promise made in return for the completion of a specified act.\u2019<\/p>\n Acceptance plays a key role in an offer and it can be defined as \u2018an unconditional assent communicated by the buyer with all terms of the offer.\u2019 [2<\/a>]<\/span> It is means that an offeree agrees to be bound by all the terms of the offer. However, in certain cases it is possible to have a binding contract without a matching offer and acceptance (Lord Denning in Gibson v Manchester City Council [1979]).<\/p>\n The courts have developed rules regarding acceptance. First of all, the acceptance of the offer must be communicated to the other party in the manner requested or implied by the offeror in the offer (Powell v Lee (1908) 99 LT 284). Secondly, if the offeree establishes a new term or varies the terms of the offer, then that reply cannot amount to an acceptance. Instead, the reply is treated as a “counter offer”, which the original offeror is free to accept or reject (Hyde v Wrench (1840) 3 Beav 334). What is more, it is important to determine the legal existence of an offer and acceptance.<\/p>\n Consideration is an essential element of every simple contract. Legally it has been defined classically as \u2018some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibilities given, suffered or undertaken by the other.\u2019 In the other hand, consideration is price paid for the other party\u2019s promise or act.<\/p>\n Consideration can take many forms, for example: the performance of a particular service, a payment of money, the delivery of property, or other things, which include a promise in return for the promise (Dunlop v Selfirge (1915, HL) case). In general, consideration is a key element to a valid contract.<\/p>\n Consideration contains the rules, which should be fulfilled. First of all, it should satisfactorily describe, represent advantages instead of paying prices in advance. Moreover, consideration must be sufficient, what is means that just proof of financial value has an influence to make consideration enough sufficient.<\/p>\n An intention to create a legal relationship is an essential element of a valid contract. It is major element of formation of contracts after agreement and consideration.<\/p>\n In order to make an agreement enforceable, the courts have created two major guidelines in the form of rebuttable presumptions for determining whether or not an intension to create legal relations exists:<\/p>\n A social and domestic nature of an agreement it is a presumed that \u2018there is no intention to create a legal relationship enforceable in law, unless the contrary can be proved\u2019.<\/p>\n A commercial or business agreements, where intention to create a legal relationship and that the agreement is legally enforceable again, unless the contrary can be shown.\u2019<\/p>\n In our case, the \u2018Company Ltd\u2019 after choosing the best offer, which meets their requirements, the company can go to the next stages connected with making the contract.<\/p>\n First of all, bidder has to submit complete tenders, providing all the information (including documents and other evidence) requested in this Invitation to Tender. Tender must be submitted by the date and time specified by \u2018Company Ltd\u2019 because otherwise the company might reject acceptance tender which is late or does not fully comply with the stipulated requirements. The complete tender must be provided in a common electronic format and the company expects sending to copies of tender documents by post.<\/p>\n The project manager in the \u2018Company Ltd\u2019 must know the rules of the contract to be able to talk effectively with chosen contractor. He is responsible for building a good relationship between the \u201cCompany Ltd\u2019 and vendors. The project manager\u2019s role is to make sure that action related with making a contract run correctly.<\/p>\n In order to make a valid offer, first of all, a legally binding offer should include clearly stated terms of the contract because if contract is not vague cannot be enforced (the Hillas v Arcos (1932, HL) case). That is more, \u2018Company Ltd\u2019 clearly predetermines all dates, which will be valid in the contract. Moreover, they determinate as well which type of hardware and software they are required from contractors and estimated budget.<\/p>\n The \u2018Company Ltd\u2019 was established budget of \u00a3100 million GBP on hardware and software provided by chosen vendor. The amount will be paid-off in two instalments: 30% of total amount of the contract will be paid before sign the contract, and 70% will be paid after delivery of the ordered hardware and software products.<\/p>\n After negotiations, both of the parties must to accept the fixed conditions of the contract and sign the contact concerning delivered with hardware and software.<\/p>\n \u2018Letter of intent\u2019 \u2013 defines \u2018the respective preliminary understandings of the parties about engage in contractual negotiations\u2019. [3<\/a>]<\/span><\/p>\n In the \u2018Company Ltd\u2019 Disadvantages:<\/p>\n Letters of intent take time to draft, discuss and sign \u2013 as a result, it delay the real work of crafting a definitive agreement and therefore forestall the closing of the relevant transaction<\/p>\n The risk associated with premature public disclose of the transaction contemplated thereby, especially when the purchase and sale of a public company or certain of its assets is involved<\/p>\n It present opportunities for unintended consequences for example poor drafting<\/p>\n Letter of intent actually promote inflexibility \u2013 according to this view signatories to a letter of intent may feel bound or constrained by the terms of the latter and may be unwilling to deviate from them.<\/p>\n Gary M. Lawrence, Carl Baranowski – Representing high-tech Law Journal Press, 1999 – 750 companies<\/p>\n Every company must to be aware of problems associated with contracts for the supply of goods and services. They should undertake steps in order to protect their products against many of factors, which can have an influence on the products.<\/p>\n First of all, the Sale of Goods Act 1979 as the main act in the United Kingdom, which regulates English contract law, can help buyers to obtain redress when their purchases \u2018go wrong\u2019. It is in the interest of anyone who sells goods or services to understand the implications of the Act for them and the responsibilities they have under it.<\/p>\n According to the Sale of Goods Act, the supplier will be obliged to sort out the problem, if the ordered hardware and software will not be match description given to the company and will not meet the offered standards. What is more, the Act states that goods should be of satisfactory quality, which the vendor is obliged to deliver it.<\/p>\n Secondly, the \u2018Company Ltd\u2019 must to focus on other aspects formulated in the contract in order to protect the supply of hardware and software:<\/p>\n Intellectual Property \u2013 it is a \u2018legal right to ownership of innovation, information and technical know-how\u2019 [4<\/a>]<\/span> , which may be protected by a copyright, patent, trademark, trade secret laws, etc.<\/p>\n The contract between the \u2018Company Ltd\u2019 and the supplier have to include a legally act of Intellectual Property and clauses concerning confidentiality:<\/p>\n The \u2018Company Ltd\u2019 have direct access-right to use the products based on software licence, however, for the sake of signed licence, data dissemination is not allowed.<\/p>\n The vendor reserves the right to copy software. In order to secure the purchased goods, the supplier determinates the limit of 1500 copies of software per 6 months. [E.F. Johnson Co. V Uniden Corp. (623 F. Supp. 1485 [D. Minn.1985])]. In order to avoidance jeopardize trade secrets just IT manger will be responsible for copying software.<\/p>\n In case of duplication or hardware or software theft, the company is obliged to inform the vendor about the situation.<\/p>\n The contract contains as well additional clauses associated with problems of supply of hardware and software, like:<\/p>\n Force Majeure, which can caused delays, cancellation or suspension or of the contract. However, both of the parties will not be responsible for those damages and losses because they have not an influence on force majeure. The force majeure include for example:<\/p>\n Act of God<\/p>\n Act of Government<\/p>\n Trade union dispute (eg strike)<\/p>\n Failure of products due to fire or accident<\/p>\n Illegal software<\/p>\n Failure of equipment<\/p>\n Data removal<\/p>\n Hack into the system<\/p>\n Retention of title \u2013 it is a clause, which allows the vendor to retain ownership over the goods supplied until such time as certain conditions are met, thus providing the supplier with a form of security against the buyer’s default or insolvency.<\/p>\n The supplier reserves the exclusive right to hardware and software, which cannot be transfer on the company.<\/p>\n Insolvency \u2013 the contract between parties includes as well The Insolvency Act 1986. It is an Act to consolidate the enactments relating to company insolvency and enactments relating to the insolvency and bankruptcy of the company. [5<\/a>]<\/span><\/p>\n In case, when the \u2018Company Ltd\u2019 does not able to defray costs of hardware and software, the vendor can automatically breach of contract or appoint a fine in the amount of 40 million GBP. Moreover, the supplier might bring a case before the court.<\/p>\n Breach of contract basically means that one or more of the terms and conditions laid out in a contract has been broken.<\/p>\nConsideration<\/h2>\n
An intention to create Legal relations<\/h2>\n
Issues associated with \u2018Letter of intent\u2019, \u2018Invitation to Tender\u2019, tenders, evaluation of tenders and acceptance<\/h2>\n
The problems associated with contracts for the supply of goods and services<\/h2>\n
Breach of contract<\/h2>\n