April 2007


Most companies issue calls for tenders when they purchase assets and/or services from suppliers. Basically, in their call for tenders, clients will describe the assets and/or services they wish to acquire, along with the time frame and other conditions of the purchase. The most obvious advantage of this type of procedure is that owners will obtain competitive prices from bidders that qualify for the tendering. In the matter of Double N Earthmovers Ltd. ("Double N"),the Supreme Court of Canada reversed the well-established principle that owners have a duty to treat bidders fairly and equally. Before this, the most recent Supreme Court of Canada ruling on such a matter was Martel Building Ltd. v. Canada, which dates back to 2000; in that case, the court confirmed a principle that it developed in Ontario v. Ron Engineering andConstruction (Eastern) Ltd., in 1981. According to that principle, the tender process imposes an implicit duty on owners in respect of bidders throughout the process and after the contract is awarded.