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According to some authors it is also possible for a public authority to be precontractually liable when the public authority has selected the private party to give effect to the contract but the contract does not take place.95 There are, however, no cases concerning precontractual liability due to the annulment of a public bid.

Netherlands

Where B’s bid was the lowest

Contract: whether a contract was concluded between A and B depends on whether A’s published statement should be regarded as an offer which was accepted by B in its bid, or rather as an invitation to make an offer, in which case B’s bid should be regarded as a mere offer. This is a matter of interpretation. The Haviltex test,96 which is the wellestablished test for determining the content and effects of a contract,97 is also the test for establishing whether a contract was concluded at all. Therefore, everything depends on whether B was entitled to regard A’s published statement as an offer the acceptance of which would lead to the conclusion of a binding contract. If the rules of the bidding process were such that they could lead to the establishment of the lowest bid without any further need for evaluation of the bids or the bidders, A’s statement may be regarded as an offer and B’s bid as an acceptance of it. However, usually a party may be expected to have some justified concern for some subjective characteristics of the other party (for example, whether it seems reliable).98 Moreover, what if two bidders make bids which (objectively) are the same? Therefore, in practice it seems unlikely that A’s statement should be regarded as an offer.99 However, if it is, then B will have the ordinary contract remedies: a right to specific performance or expectation damages. In that case, it does not matter whether the actual facts were as stated in (i)(a) or as in (i)(b).

Precontractual liability: although the parties were not technically involved in any proper negotiations, A would probably be liable for breaking off negotiations since the parties’ ‘negotiations’ reached the

95Monateri, La responsabilita` contrattuale e precontrattuale, p. 417.

96HR, 13 March 1981 (Ermes/Haviltex), NJ 1981, note Brunner, 635; AA 30 (1981), 355, note Van Schilfgaarde.

97HR, 17 Dec. 1976 (Bunde/Erckens), NJ 1977, note GJ Scholten, 241.

98See HR, 10 Apr. 1981 (Hofland/Hennis), NJ 1981, note Brunner, 532.

99Cf. Hartkamp, Mr. C. Asser’s handleiding tot de beoefening van het Nederlands burgerlijk recht; Verbintenissenrecht, vol. II, Algemene leer der overeenkomsten, no. 141.

so-called ‘third stage’.100 When B had made a bid which turned out to have been, in objective terms, the lowest bid it was justified in expecting that a contract would be concluded. Or, to put it differently, even beforehand, B was justified in expecting that a contract between it and A would be concluded if it made the lowest bid. There was no reason why B should expect that A would not conclude a contract with it if it made the lowest bid (and if its bid was otherwise in conformity with the rules of the bidding process). Therefore, the ‘negotiations’ may be said to be in the third stage where not only the expectation interest in damages may be claimed but also further negotiations and, according to some writers, even the conclusion of the contract. If negotiations were in the third stage, some reasons may still justify breaking off the negotiations (such as a change of circumstances, and perhaps a better offer from a third party),101 but the reasons mentioned under (i)(a) and (i)(b) certainly do not qualify as such. Reason (a) falls under A’s own risk: it is responsible for its own organisation; and reason (b) rather shows that the whole bidding was a sham, and should not help A as a defence (nemo auditur turpitudinem suam allegans).

However, if a court was inclined to leave A some autonomy in determining which bid or bidder it preferred (as discussed above), then the same reasons may lead a court to accept that B could not reasonably expect that the mere fact that its bid would be the lowest would ensure that a contract would be concluded. Nevertheless, the statement of facts only states the facts mentioned under (a) and (b) as the reason why A did not award the contract to the lowest (that is, B’s) bid.

Where B’s bid was not the lowest

Under these circumstances there does not seem to be any reason to accept any liability for A towards B because B suffers no loss. Even if A had not failed properly to consider its bid, B would never have won the bidding since its bid was not the lowest. Therefore, B has neither lost a profit nor incurred expenses or lost opportunities that it would not have incurred or lost if its bid had been properly considered.

Public biddings have to respect certain public rules and principles. In case of biddings for economically important contracts, EC rules apply.

100See the Dutch report on case 1.

101See HR, De Ruiterij/Ruiters (1996), discussed in the report on case 1.

300 precontractual liability in european private law

If A is a public authority, a special regulation would apply with regard to the procedure for the award of the public work contract of this case. However, this regulation, which is based on Directive 2004/ 18/EC, does not contain any special provisions on liability in damages. This means that regardless of whether A is a private company or a public authority, B is in principle left with the same remedies as discussed above.

However, a proposal for a new general statute on public tenders102 is pending before the Dutch Parliament. This proposal, like Directive 2004/18/EC, regards equal treatment, non-discrimination and transparency as the leading principles in the process of a public bidding by a public authority. In this proposed statute, there are no special provisions on liability either. However, in the official comment on the proposal, the government states that the legal protection in case of disputes arising out of public tenders is the same as for disputes arising out of contract or tort in general.103 Moreover, it is also stated that a business may have a claim in tort if a public authority has violated the rules on public tenders.104

This means that on the facts as stated in both situations (i)(a) and (i)(b), A would probably be liable in tort towards B for violation of the principles of equal treatment and non-discrimination. In these circumstances, the damages may extend to lost profits.105 On the facts as stated in situation (ii), there does not seem to be any reason to accept liability for A towards B because B suffers no loss.

The official comments on the new statute emphasise that, in addition to these remedies, in an urgent situation B could ask the civil judge in summary proceedings for a temporary measure (injunction) in order to stop a tort being committed. Temporary measures available to B in this kind of proceedings might include an order by the court to consider B’s offer properly, a prohibition on A contracting with a specified third party, or an order for a retender by A. These provisions are available to B whether or not A has concluded a contract with C. If A has already concluded a contract with C then it is possible that A has to terminate this contract or suspend its performance. Obviously, in the latter case A would become liable towards C.

102 Kamerstukken II, 2005–2006, 30501, no. 2. 103 Ibid. no. 3. 104 Article 6:162 BW. 105 Article 6:96 BW.