Contract Law Example Question

Reply Wed 4 Jan, 2017 08:47 am
My university teacher set this discussion question and I was wondering what every bodies thoughts on it were?

The NSC is a government body which arranges for the salvage of shipwrecks lying within the coastal waters of the UK. Recently, the Hesperus was reported as having been damaged in heavy seas and that its captain had run the ship aground on a remote Scottish island. The NSC invited salvage operators to bid for the salvage rights of the Hesperus in the following terms:

‘We imagine great interest in the ship as its cargo includes a quantity of Roman coins. Bidding is by sealed competitive tender. Only one bid will be accepted from any one company. All bids will remain confidential. We bind ourselves to accept the highest bid.’

A Ltd and B Ltd both bid for the salvage rights. A Ltd bid £100,000, whilst B Ltd bid ‘£90,000 or £10,000 more than the next highest bid, whichever is the greater.’ NSC assumed that B Ltd’s bid was the higher (i.e. £110,000) and therefore accepted it. A Ltd now claims that its bid was the higher and that NSC is in breach of contract in accepting B Ltd’s bid. Advise the NSC.
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Reply Wed 4 Jan, 2017 09:47 am
B submitted 2 bids, which was not allowed. (90,000 PLUS another bid that would outbid any others by 10,000. )
cicerone imposter
Reply Wed 4 Jan, 2017 11:57 am
I agree; they could have condioned their open bid to state their bid is always .01c more than the highest bid. There are no auction in existence that accepts such bidding.
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Reply Wed 4 Jan, 2017 02:22 pm
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