The Aero Club sent in a significantly higher bid for both classes of aircraft, and placed their offer in the Town Hall letter box at 11 am on the 17th, an hour before the deadline.

At this point Red Rose Helicopters, having consulted their lawyers, informed the Council that they were contractually bound to grant the licence to them.

As a result of this the Council withdrew their offer of a second round of tenders, and pursued the contract with Red Rose Helicopters.

The Council appealed, and it was taken to the Court of Appeal, where Roger Toulson QC and Hugh Davies represented the Council, and Michael Shorrock QC and Paul Sylvester represented the Aero Club Bingham LJ's leading judgement read: A tendering procedure of this kind is, in many respects, heavily weighted in favour of the invitor.

In all the circumstances of this case (and I say nothing about any other) I have no doubt that the parties did intend to create contractual relations to the limited extent contended for.

Mr. Shorrock sought to sustain this argument in particular by reliance on Ministry of Housing and Local Government v Sharp [1970] 2 QB 223, Ross v Caunters [1980] Ch 297 and American Express International Banking Corporation v Hurley [1985] 3 All ER 564, none of which (he submitted) was inconsistent with the principles laid down in the House of Lords' recent decision in Caparo Industries plc v Dickman [1990] 2 WLR 358.

Having heard the argument, I am tentatively of opinion that Mr. Toulson's objections are correct and that the Club cannot succeed on this point if they fail on the other.

The practical consequences of deciding the contractual issue on liability in the Club's favour must, if necessary, be decided hereafter.Stocker LJ agreed with Bingham LJ, and added: The format of the invitation to tender document itself suggests, in my view, that a legal obligation to consider to tender submitted before any award of a concession was made to any other operator was to be implied in the case of any operator of aircraft to whom the invitation was directed who complied with its terms and conditions.

Of particular significance, in my view, was the requirement that tenders be submitted in the official envelope supplied and endorsed, as described by Bingham LJ., by the Council.

There can be no doubt that this was the intention of both parties, as exemplified by the defendants' actions when their error with regard to the time of receipt of the plaintiffs' tender was appreciated.

I agree that in the light of this conclusion no useful purpose can be served by consideration of the difficult questions which arise upon the claim formulated in tort.