(1) With reference to the reported cases, discuss the precise legal effect of an invitation for tenders. In the course of your answer, explain the legal position where: an invitee submits a referential tender; an invitee underquotes due to inaccuracies in the tender documents issued by the invitor; the invitor is an organ of state and, in calling for tenders, exercises a public power in terms of legislation. Having completed your discussion, comment briefly on the legal position in the following situations. (a) Fawlty Erections (Pty) Ltd, a private building contractor, sends letters to selected plumbing contractors inviting them to submit tenders for the execution of certain plumbing work as set out in the tender documents available for inspection at our premises. The letter states Only tenders that comply with the specifications will be considered. Fawlty Erections does not bind itself to accept the lowest or any tender or to give reasons for its rejection of any tender. One of the selected parties, Gungout, inspects the tender documents and submits a tender. He subsequently learns that, although his tender complied fully with the specifications, Fawlty Erections awarded the contract to another contractor, Slough, who tendered to do the work for a contract price of R3 000 less than any other tender submitted. Gungout ascertains further that his own tender was for a lower price than all the other tenders submitted, apart from that of Slough. (b) The Council of Pleasantville Municipality, after receiving numerous requests to erect a new taxi rank, publishes a notice in the press inviting interested parties to submit tenders for the job. The conditions of tender state: It is recorded that the Council does not bind itself to accept any tender, and it is not compelled to provide any reason for the rejection or acceptance of any tender. The lowest tender received is that of Reddy-Steady Builders, a large and financially sound contractor, which performed a large part of the work for the old taxi rank. The Tender Adjudication Committee of the municipality recommends to Council that it accept this tender. However, at a meeting behind closed doors to decide the issue, the mayor manages to persuade the Council to award the contract to the mayors brother-in-law. The latter has recently started in the building trade and has promised that, if awarded the contract, he will form a company or CC and start work as soon as he can raise the necessary funds. (2) Breach, no matter how serious, does not itself terminate the contract. It is only where the innocent party cancels the contract on account of the breach that it comes to an end. Referring to relevant case law, discuss the following: (a) when a contract may be cancelled on the ground of mora debitoris, positive malperformance, and repudiation (note: there is no need to explain what is meant by these concepts); (b) how cancellation of a contract is achieved; (c) the effect of cancellation. Having completed the above, consider the following problem. Simone sells a piece of land to Poobie for R400 000. The price is to be paid by way of a deposit of R50 000 within 7 days of signature of the contract and the balance of R350 000 on registration of transfer of the property into Poobies name. Poobie is obliged to lodge a bank guarantee for payment of the balance before Simon can be called upon to give transfer. No date for lodgment of the guarantee or for transfer of the property is agreed upon. Poobie pays the deposit within the stipulated period. Shortly thereafter, Simone consults you. She states that she is ready to give transfer and is anxious to obtain payment as soon as possible. Otherwise she wishes to call off the transaction and resell the property. To date, Poobie has not indicated whether he has been successful in obtaining a guarantee for the balance of the price. What steps would you advise Simone to take in the circumstances? Outline the steps briefly.