(31) Arts. 1325 – 1326: Consent II – Advertisements and Bidding In biddings, it is not yet a complete offer.

s not yet a complete offer. The title is not yet transferred to the highest
or lowest bidder unless the contrary is stated.
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-- To find out whether an offer is complete, you have to look at the content of the text.
CODAL:
Look at the Notice – the bidding rules are there. Look for the provisions saying that the
highest bidder, for example, shall be awarded with the contract. Therefore, it is clear
Art. 1325: Unless it appears otherwise, business advertisements of things for sale are
that whoever makes the highest bid will have the contract.
not definite offers, but mere invitations to make an offer.
However, it is normal that the one offering the bid may reject offers of bid. You will
Art. 1326: Advertisements for bidders are simply invitations to make proposals, and the
usually see that in government ads for bidding. The point of that, as held in Public
advertiser is not bound to accept the highest or lowest bidder, unless the contrary
Estates, is to prevent a party who may claim that he is the highest bidder. Thus, the
appears.
contract must be automatically awarded to him. The reservation entitles the government
-- to reject any bid, including the best bid.

PRELIMINARY QUESTION: Are business advertisements of things for sale
definite offers? It depends.
If it appears to be a definite offer containing all the specific particulars needed in a
contract, it really is a definite offer.
Unless they appear to be given otherwise, it means that the offer is complete and an
acceptance will result to a valid contract.
If there is a Reservation provision or clause, you do not have any remedy. You cannot
sue or ask the Court to award the contract in your favor even though you offered the
best bid. There is no civil remedy here.
But you may sue the one who organized the bidding (officers) and claim that they are
unduly favoring another bidder to the detriment of the procedure, the government and
the public. You will then have a leverage. But the next time around, you will not be able
to participate anymore in any bidding.

ILLUSTRATION A RESERVATION CLAUSE: not exclusive for government transactions. In fact, it is being
“For sale: 900sq. meter lot with a brand new 1-1/2 storey house at 2332 Paranaque used by all who organize bidding procedures because sometimes, you just want to
City, Metro Manila for P10million cash” reject a bid without giving any reasons.

This is a definite offer, from which the advertiser cannot back out, once it is accepted 31(1) Public Estates v. Bolinao
by another.
FACTS:
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The PEA published an invitation to bid in several newspapers for the services of
If important details are left out, the advertisement is not a definite offer, but a mere security guards. The invitation stipulated that PEA reserves the right to reject any
invitation to make an offer. proposal, impose additional terms and conditions, and accept the proposal most
advantageous to the government.
ILLUSTRATION B
“For sale: 1000sq. meter lots at P100million to P150million at South Forbes Park. After the bidding, Masada Security which had the 3rd highest bid, was chosen instead
Number: 09171234567” of Bolinao Security which was the 2nd highest bidder because it lacked a license to
operate. Bolinao Security insists that it should be the winning bidder.
This is clearly merely an invitation to make an offer, which the advertiser is free to
accept to or reject. Bolinao argues that since it was able to obtain a new license, it should retroact to the
time of the bid. It also argues that PEA has waived any defects by giving it an extension
-- in one of its contract services.

ADVERTISEMENT FOR BIDDERS ISSUE: Is the choice of Masada Security proper even if Bolinao Security had a
The general rule is that the advertiser is not bound to accept the highest or lowest bid? YES
bidder.
PEA’s grant of extension is not a waiver. The extension of the security service contract
is not an extension of the effectivity of the license to operate a security agency. The
rules in public bidding clearly provide that qualifications of bidders shall be determined
at the time of the opening of the bids.

By giving its bid, Bolinao Security must adhere the terms and conditions imposed by
the government namely that PEA reserves the right to reject any proposal.

ANALYSIS: Government is not forced to accept the highest bid. The Court held that the
clause is invalid. The government has the right to reject any and all bids. The highest
bidder cannot go to the government and tell them to give them the contract. If you are
the losing bidder, you can go to the Ombudsman. You will be blacklisted though.

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