METRO RAIL TRANSIT DEVELOPMENT CORPORATION, Petitioner, vs.

GAMMON
PHILIPPINES, INC.

G.R. No. 200401, January 17, 2018

(Leonen, J.)

Parsons, the management team that oversees the MRT's construction execution, issued a Letter
of Award and Notice to Proceed to Gammon. It was accompanied by the formal contract
documents. In a Letter dated September 2, 1997, Gammon signed and returned the Notice
without the contract documents. On September 9, 1997, Gammon transmitted the contract
documents to Parsons.

In a facsimile transmission sent on the same day, Parsons directed Gammon "to hold any
further mobilization activities. MRT asked Gammon to re-design. Subsequently, Parsons issued
Gammon a another Notice to Proceed for the engineering services based on the redesigned plan.
In a Letter dated June 22, 1998, MRT rejected Gammon's qualified acceptance and informed
Gammon that the contract would be awarded instead to Filsystems. Gammon notified Parsons of
its claim for payment of all costs, damages, and expenses due to MRT's suspension order.

Q: Is there a perfected contract between the parties?

A: Yes. A contract is perfected when both parties have consented to the object and cause of the
contract. In bidding contracts, the award of the contract to the bidder is an acceptance of the
bidder's offer. Its effect is to perfect a contract between the bidder and the contractor upon
notice of the award to the bidder. Here, MRT has already awarded the contract to Gammon, and
Gammon's acceptance of the award was communicated to MRT before MRT rescinded the
contract.