MISTAKEN BIDS AND UNILATERAL MISTAKEN ASSUMPTIONS, A NEW SOLUTION FOR AN OLD PROBLEM?

Abstract

The “two-contract” analysis of the Supreme Court of Canada’s decision in Ron Engineering has created a very substantial obstacle to relief for mistaken bidders who discover calculation errors upon the opening of the bids. Nonetheless, Canadian courts are inclined to narrowly distinguish that analysis and grant relief in cases of extreme error in order to avoid unduly onerous penalties for mistaken bidders and large unearned windfalls for issuers of invitations to bid. This article argues that recent decisions of Canadian appellate courts articulating a rule which would excuse bidders where the burden imposed by the miscalculation is so grossly disproportionate that enforcement of the mistaken bid would be unconscionable represent a more satisfactory and elegant solution to the problem of mistaken bids and represents a useful incremental change in the law of contractual mistake.