The Province of British Columbia issued a request for proposals (RFP) for the construction of a highway, restricting eligible bidders to six proponents.
The Province accepted a bid from an ineligible joint venture involving one of the eligible proponents and an ineligible third party.
The unsuccessful eligible bidder, the appellant, sued for breach of contract.
The Province relied on an exclusion clause in the RFP that barred claims for compensation as a result of participating in the RFP.
The Supreme Court of Canada held that the Province breached the tendering contract by accepting an ineligible bid.
The Court laid to rest the doctrine of fundamental breach and established a three-part test for exclusion clauses.
Applying the test, the majority found that the exclusion clause did not apply to the Province's conduct, as the appellant's claim arose from the Province's dealings with an ineligible bidder, not from the appellant's participation in the RFP process.
