Legal Updates

An agreement executed following a tender will be construed pursuant to tender publisher’s intent

January 15, 2017
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A transportation company won a tender and entered into an agreement with the municipality to operate three shuttle lines. After execution of the agreement the municipality unilaterally changed the shuttles lines and unified lines according to the municipality's needs, a change that reduced the transportation company's revenues and resulted in a breach of contract claim.

The Court held that a contract should be construed according to the intention of the parties, as implied from the contract and if the contract does not imply - from the circumstances.  In the case of a tender the contract's language reflects only the intent of the publisher of the tender as to the object and the purpose of the tender and the bidder is deemed to have agreed to those.  The agreement does not include a specific provision defining what a `route` or a `shuttle line` is and there was no restrictions on lines consolidation and thus no breach of contract exists.