GR 147410; (February, 2004) (Digest)
G.R. No. 147410 ; February 5, 2004
THE INSULAR LIFE ASSURANCE COMPANY, LTD., petitioner vs. ASSET BUILDERS CORPORATION, respondent.
FACTS
Petitioner Insular Life invited bids for the construction of its Lucena City building. Respondent Asset Builders Corporation submitted a bid proposal, accompanied by a bid bond, which was the lowest among the bidders. The Instruction to Bidders stipulated that a bid was valid for 60 days from opening and that the winning bidder would be notified in writing to execute the contract within five days from receipt of the “Notice of Award.” During post-qualification, petitioner proposed that respondent adjust its bid amount to accommodate a wage increase, to which respondent later agreed. However, petitioner subsequently decided to postpone the project indefinitely and informed all bidders that their bids had lapsed. Respondent demanded compensation for expenses, claiming a perfected contract existed, but petitioner refused.
ISSUE
Whether a contract of construction was perfected between the parties.
RULING
No contract was perfected. The Supreme Court ruled that the exchange between the parties constituted mere offers and counteroffers, not a perfected agreement. The Instruction to Bidders was a mere invitation to bid. Respondent’s bid was an offer, which petitioner never accepted in the manner expressly prescribed. The required written “Notice of Award” was never issued to respondent. Petitioner’s request for a bid adjustment was a counteroffer, and respondent’s assent thereto was a new offer. Petitioner retained the right to withdraw its own counteroffer or to reject any offer prior to acceptance. Since the 60-day bid validity period lapsed without petitioner issuing the formal Notice of Award, no acceptance was communicated. Consequently, no meeting of the minds occurred, and no contract was born. The Court emphasized that an offer must be accepted absolutely and in the manner specified by the offeror. The absence of the prescribed written acceptance was fatal to respondent’s claim. The petition was granted, reversing the Court of Appeals.