Case Summary- Harvela Investments v Royal Trust Co of Canada [1985]
Facts of the case The defendant R invited the plaintiff H and a second defendant O to submit the sealed bids doe specific shares. The defendant R, promised to accept the highest bid. H bid $2 175 000 and O bid $2 100 000 and $101 000 more than any other offer. As a result, R believed that he he was bound to sell to O the shares for $2 276 000. R’s solicitor sent a telex to O and H stating that ‘in the circumstances, our clients are bound to accept and do herby accept the offer received from O H sought an order for specific performance and a declaration that R was bound to transfer the share to it. Held R’s invitation to bid created a fixed bidding sale. Therefore, it was not consistent with the intention to accept referential bids (the bids that are based on reference to other bids). As a result, R was obliged to accept H’s bid as the highest bid submitted that was valid. The telex was not an offer or acceptance of any new contract. It was an attempt to fulfill the existing obligations between R and O. In conclusion, no obligation to sell shares to O. Conclusion The invitation to bid created a fixed bidding sale where the defendant was obliged to accept the highest bid and not referential bid.
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