2022-03-15（182）Engineering law and the ICE Contracts

Although a time limit for validity of a tender may not bind the tenderer, it does have the effect that the tender ends automatically when the time expires (p. 134, N. 2). An employer or main contractor should be careful not to let the time go by before accepting, or the tenderer may demand improved terms for revival of his tender.

As to waiver, see p. 157.

(c) WRITING. Generally, provided the courts believe verbal evidence that a contract was made, it is perfectly effective even though not recorded in writing. But in some cases—e.g. contracts of guarantee (pp. 320–2) and (unless the contract has been partly performed) contracts relating to land or easements (p. 423)—a contract is not enforceable without written evidence however much verbal proof of it there may be. 

And the whole business of tying everything up in a proper written contract is strongly recommended by lawyers in all cases, and not for self-interest—without being cynical the following may be given as a general warning:

     A trading agreement was made to which the parties added what they called an “honourable pledge” clause—that the agreement was to be binding in honour only and not to be enforceable by the courts.

     Presumably the parties had particular confidence in the integrity of each other, but in fact they eventually fell out and one party took proceedings to the House of Lords in an unsuccessful effort to have the agreement enforced. The result was a five-figure profit to the legal profession in costs. 

Of course, legal and moral right should not be confused and it is not generally profitable in the long run to pay too much attention to the legal limits of one’s duties, but a detailed written contract does supply a framework for preventing and settling disputes.

(d) CAPACITY. A person under 18 is in some circumstances not bound by a contract. More important, a corporation may have only limited capacity to make a contract. A local authority or other statutory corporation has only the power to make contracts given to it by statute, and contracts outside these powers (technically ultra vires) are not binding. In the case of the ordinary commercial company legislation and the wide powers traditionally conferred by the memorandum of association, which is the constitution of the company, have made the ultra vires rule unimportant in practice. 

The rule which formerly required a contract by a corporation to be under seal has been repealed. The Crown is now fully liable on contracts made on its behalf, provided the agent making the contract has authority, and no special formalities are necessary.