Snow and Ice Maintenance
Tenders and
Contract Interpretation
Robert Kennaley
McLauchlin & Associates
Good vs. Bad Contracts
 Understanding
and Managing Risk
under a Contract is important
regardless of whose form of
Contract is proposed
 Understanding
the difference between
a good contract and a bad contract is
critical
Good vs. Bad Contracts
 Historical
Problems with Contracts:
Inadequate Descriptions of the Work
- vague, ambiguous, inconsistent and
confusing descriptions of the work
Good vs. Bad Contracts
 Historical
Problems with Contracts:
Contractors Assume Too Much Liability- Over-reaching “Hold Harmless” Clauses
- Over-reaching Scopes of Work
The Contract and Scope of Work
 Liability
Starts with the Occupier under
the Occupier’s Liability Act
 The
Owner/Property Manager/Client
will be an Occupier under the Act
The Contract and Scope of Work
 The
Owner/Property Manager/Client can
assign under a Contract some of its
responsibilities under the Act
 The
Contractor becomes responsible to
meet the obligations he assumed under
the Contract
The Contract and Scope of Work


The Contractor is not responsible to do
work, undertake tasks or assume risk
unless he has, either expressly or by
implication, agreed to do so under the
Contract
It is accordingly critical that the
Scope of Work be properly
described in the Contract
The Contract and Scope of Work

To Properly Price the Work and Avoid
Disputes the Contractor Needs to:
- understand the Scope of Work
- not assume any unreasonable obligations
under the Contract
- avoid obligations he is not
being paid to assume
The Contract and Scope of Work
 To
Properly Get a Good Price and Avoid
Disputes, the Owner Needs to:
- provide a clear Scope of Work
- avoid unreasonable or impossible
requirements
(which are expensive to price)
(which can lead to disputes)
The Contract and Scope of Work

The Overreaching Scope of Work:
- Promising the Impossible
- Promising the Unknown
- The “open by” Undertaking
- The problem of the “Second Pass”
The Contract and Scope of Work

Contractual Terms can be Divided into
Two Parts:
1. General Conditions
–
Generally apply to all projects
2. Specific Conditions / Schedules
–
–
–
Specifies work to be performed
Specifies price
Usually varies from project to project
The Contract and Scope of Work
1.
General Conditions
–
–
–
–
–
–
–
The Parties
Payment Provisions
Workplace Safety & Insurance Issues
Notice Provisions
Indemnification Provisions
Termination Provisions
Insurance Provisions
The Contract and Scope of Work
General Conditions Should be unique to
Winter Maintenance Industry !!
Parked Vehicles
 Improperly Maintained Premises
 Severe weather conditions?
 Stop work orders
 Strikes, lock-outs, etc.

The Contract and Scope of Work
2. Specifications / Schedules / Site Plans


Should be made part of the Contract
These are More Important than the Legalese
The Contract and Scope of Work
2. Specifications / Schedules / Site Plans

Site Plans Should Be Used!!!

These Should be Made a Schedule

Particular Limitations / Issues Can
and Should be Addressed in the Site Plans
The Contract and Scope of Work

The Site Plan Should Clearly
and Accurately Describe:
– The work to be performed
– Any limitations on the scope of work
– Site conditions
– Special site features to be considered
Discretion to Use Ice Melters

To Avoid Disputes Contracts should clarify
the contractor’s obligation to use ice melting
products

Contracts Should Clearly Specify who makes
the decision about the application of ice
melting products…

… either it is the Contractor or the Client
Liability for the Slip and Fall
 the
Contractor Generally Avoids Liability:
– if he properly performs his contract;
– if he is not otherwise Negligent;
– and so long as he has not assumed
responsibility to do more than properly
perform his work under the Contract
– this is often done through the over-reaching
‘Hold Harmless Clause’
Hold-Harmless & Indemnification

Indemnification should only occur where
the contractor breaches the contract
or is negligent in the performance
of his work as specified

Indemnification should also be limited
to damages for personal injury or
property damage, and to the limits
of the Contractor’s insurance
Contracts put out to Tender

What are the Options where less than clear, or
less than preferred, contractual terms are put
out to tender?
Don’t Counter Offer!
 Don’t Qualify or Clarify Your Bid!!

Contracts put out to Tender

M.J.B. Enterprises Ltd. v. Defence
Construction (1951) Ltd., [1999] 1 S.C.R. 619
– the low bidder had added a handwritten
note to the tender form, increasing its price
in the event a certain pipe was to be used
– M.J.B. was the second low bidder
Contracts put out to Tender

M.J.B. Enterprises Ltd. v. Defence
Construction (1951) Ltd., [1999] 1 S.C.R. 619
– MJB objected that it should have been
awarded the Contract as the note was a
qualification which:
rendered the low bid non-compliant; and
 rendered the low bid incapable of acceptance

Contracts put out to Tender

M.J.B. Enterprises Ltd. v. Defence
Construction (1951) Ltd., [1999] 1 S.C.R. 619
– The Owner relied on the privilege clause:
“The lowest or any tender
not necessarily accepted”
– The Owner argued that the clause allowed it
to award to even a non-compliant bidder
Contracts put out to Tender

M.J.B. Enterprises Ltd. v. Defence Construction
(1951) Ltd., [1999] 1 S.C.R. 619
– The Court:
 found
an implied term that only compliant bids
would be considered
 held that the privilege clause did not allow the
Owner to award to non-compliant bidder
Contracts put out to Tender

Bidding Contractors Who Qualify or Clarify
their Bids run the risk that their Bids
will be rejected out of hand
as being non-compliant!

In fact, Tendering Authorities
are now well versed in the
Law of Tendering and will
generally not consider
non-compliant bids.
Contracts put out to Tender

Contractors who are concerned about the terms of a
Contract put out to Tender can:
-
request a clarification from the Owner/Consultant in
accordance with the terms of the Tender Package;
-
(in which case the Owner/Consultant is to issue
the response to all bidding contractors)
Contracts put out to Tender

Contractors who are concerned about the
terms of a Contract put out to Tender can:
-
request that the terms, perhaps be changed;
-
(in which case the Owner/Consultant can
issue an Addendum, if so inclined)
Contracts put out to Tender

Contractors who are concerned about the
terms of a Contract put out to Tender can:
- price the risk assumption or refuse to
bid the Contract.
Snow and Ice Maintenance
Tenders and
Contract Interpretation
Robert Kennaley
McLauchlin & Associates