Introduction
The Court of Appeal’s decision in *Blackpool and Fylde Aero Club v Blackpool BC* [1990] is a significant case in English contract law, particularly concerning the formation of contracts through the process of tender. The case established that while an invitation to tender is generally considered an invitation to treat, it can also constitute a unilateral offer to consider all conforming bids. The court’s finding of a “two-contract” structure introduced a duty to act fairly upon those inviting tenders, protecting the procedural expectations of the parties submitting them. This note will outline the facts and judgment before analysing the case’s contribution to contract law.
Facts of the Case
Blackpool Borough Council managed the local airport and granted a concession to a single operator for pleasure flights. When the existing concession was due for renewal in 1983, the Council invited the incumbent concessionaire, the Blackpool and Fylde Aero Club, and six other parties to submit tenders. The invitation to tender included a clause stating: “The Council do not bind themselves to accept all or any part of any tender. No tender which is received after the last date and time specified shall be admitted for consideration.” The deadline was stipulated as 12 noon on 17 March 1983.
The Aero Club submitted their tender by hand, placing it in the Town Hall letterbox at 11 am on the deadline day. However, the Council’s staff failed to clear this letterbox at noon as they were supposed to. Consequently, the Club’s tender was not collected until the following morning. It was then marked as having arrived late and was not considered in the tender review process. The concession was awarded to another bidder. The Aero Club sued the Council for breach of an alleged contract to consider their tender, which they argued had been submitted on time.
The Court of Appeal’s Judgment
The Court of Appeal upheld the trial judge’s decision in favour of the Aero Club. The court found that although no contract for the main concession had been formed, there was a separate, collateral contract obliging the Council to consider the Club’s tender.
Bingham LJ, giving the leading judgment, acknowledged the general principle from *Spencer v Harding* (1870) that an invitation to tender is an invitation to treat, and the tender itself is the offer. However, he reasoned that the specific circumstances of this case gave rise to a contractual obligation to consider tenders. The invitation to tender was not open to the public at large but was directed to a small number of selected parties. The process was “clear, orderly and familiar,” with detailed conditions for submission.
In this context, Bingham LJ held that the Council’s invitation to tender constituted a unilateral offer to consider any conforming tender submitted before the deadline. The act of submitting such a tender was the acceptance of this unilateral offer, thereby creating a binding collateral contract. The consideration for the Council’s promise to consider was the tenderer’s act of going to the trouble and expense of preparing and submitting the bid. As the Council had failed to consider the Club’s validly submitted tender, they were in breach of this collateral contract. The Court awarded the Club damages based on its loss of a chance to be awarded the main concession.
Analysis and Significance
The decision in *Blackpool and Fylde Aero Club* is important because it introduced a level of fairness and procedural certainty into the tendering process. It modified the traditional, rigid rule that an invitation to tender is always a mere invitation to treat. The court achieved this by creatively applying the concept of the unilateral contract (Poole, 2021). The “two-contract” analysis allows the law to distinguish between the main contract (for the goods or services being tendered for) and a preliminary, procedural contract governing the tender process itself.
This development ensures that those who invite tenders cannot act arbitrarily. Where the invitation sets out a formal process, there is a legitimate expectation from tenderers that if they comply with the rules, their bid will at least be opened and considered. The court recognised the commercial reality that preparing a tender involves significant time, effort, and expense. Without the protection afforded by this collateral contract, a party inviting tenders could simply ignore a valid bid for any reason, which would be unjust (McKendrick, 2023).
However, the principle is not applied in all tendering situations. Its application depends on the specific facts and the presumed intention of the parties. The formal nature of the invitation and the fact it was sent to a small, selected group were key factors in the court’s reasoning. This means that less formal invitations, or those open to a wider audience, might not give rise to the same obligation. The case therefore demonstrates the flexibility of contract law in implying obligations to reflect the reasonable expectations of commercial parties.
Conclusion
*Blackpool and Fylde Aero Club v Blackpool BC* remains a key authority in the law of contract formation. By establishing the possibility of a collateral contract to consider conforming bids, the Court of Appeal provided a valuable remedy for tenderers against procedural unfairness. The decision strikes a balance between the freedom of the party inviting tenders and the legitimate expectation of those who submit them, showing how traditional contractual principles can be adapted to achieve a just and commercially sensible outcome.
References
* McKendrick, E. (2023) *Contract Law*. 15th edn. Palgrave Macmillan.
* Poole, J. (2021) *Textbook on Contract Law*. 15th edn. Oxford University Press.
* *Blackpool and Fylde Aero Club v Blackpool BC* [1990] 1 WLR 1195; [1990] 3 All ER 25 (CA).
* *Spencer v Harding* (1870) LR 5 CP 561.
