01-27 GENERALS WINTER25 FINAL EDIT (JAN 25) - Flipbook - Page 12
ADVOCACY
UNDERSTANDING CONTRACT A
AND CONTRACT B
What Every General Contractor Must Know Before Bidding
By LEONARD FINEGOLD, Chair, Construction Group, Cambridge LLP
and POONEH SOORESRAFIL, Associate, Construction Litigation Group, Cambridge LLP
N OUR EARLIER ARTICLE, “Bidding Smartly—Not Just Quickly,” we
highlighted the importance of asking the right questions
before submitting a bid. In this next installment, we turn to
a foundational, but often misunderstood, pillar of Canadian
construction tendering law: “Contract A” and “Contract B”.
These concepts shape everything about the bidding process,
from your rights as a potential bidder, your rights after submitting
your bid, to your obligations toward subcontractors and suppliers
expressly named by you in your bid.
This article explains Contract A and Contract B in clear
practical terms, then builds on the most current Ontario case law
developments, particularly around subcontractor naming and
owner privilege clauses.1
I
1. Contract A and Contract B in Plain Language
Canadian tendering law operates on a two-contract model: Contract
A and Contract B.
CONTRACT A — THE “BIDDING CONTRACT”
Contract A arises only when a compliant bid is submitted in
response to an owner’s request for proposals.
INTRODUCTION TO
THE FOUR-PART SERIES
This article is the first in a newsletter
series aimed at helping general
contractors navigate the legal and
strategic challenges at each stage of a
construction project.
Once Contract A is created, the owner, and its agents, must treat
all compliant bidders fairly and equally. The owner, and its agents,
must evaluate bids only according to the criteria as set out in the
tender documents, all of which form part of Contract A, and the
bidder must comply with all the terms and conditions of Contract A.
For example, being prohibited from withdrawing its bid for a period
of 90 days.
If a bid is non-compliant, as determined by the owner and/or its
agents, acting fairly and reasonably, Contract A is not created, and
the bidder has no legal rights as a bidder. For example, a bidder’s
failure to strictly comply with all the requirements of Contract A,
such as submitting a bid after the set “closing date”, submitting
conditional bids and/or bids quali昀椀ed in any manner or submitting
unsolicited bids.
CONTRACT B — THE “CONSTRUCTION CONTRACT”
When the owner accepts one compliant bid, that acceptance creates
Contract B, the formal contract, that now becomes the Prime Contract,
which governs the actual work. There can be only one Contract B
with the successful bidder.
STAGE 1:
PART 1 - Bidding Smartly
PART 2 - Prebid Contract Pitfalls
STAGE 2:
PART 3 - Contract A and
Contract B Untangled:
STAGE 3:
PART 4 - Post Contract A and
Contract B Performance Pitfalls:
This part focuses on navigating the prebid rollercoaster ride of striving to be
the lowest bidder, while attempting to
manage financial risks.
This part will explore the legal and
financial framework prior to the creation
of Contract A, including assessing
financial risks, accurately interpreting
the drawings, specifications, and scope
of work to ensure a carefully prepared
and financially rewarding bid.
This part will guide you through
post-Contract A (post-tender)
negotiations, highlighting the legal
obligations of good faith in the
performance of Contract B, and the
fine line between clarifications and
material changes.
12 the generals • WINTER 2025/2026
THEGENERALS.NET
