Letter of acceptance

A letter of acceptance (LOA) is the buyer's written notice accepting a successful bid or tender. In Canadian public-sector tendering — especially construction — it is the award communication that locks in the deal: once issued, it binds the winning bidder to sign the formal contract documents, even though the detailed contract paperwork usually follows days later.

Legal effect: the letter binds before the contract is signed

Official procurement guidance is explicit about the binding effect. Nova Scotia's government Construction Contract Guidelines, section 7.1, state: "The successful bidder will be notified in writing. The letter of award constitutes a final binding letter of acceptance and obligates the contractor to sign the formal contract documents." This reflects how contract law treats a tender: the bid is an irrevocable offer, and the buyer's acceptance of it in writing completes a binding agreement — the formal long-form contract merely restates and evidences it.

How the federal process words it

Federal construction tender packages posted on CanadaBuys use equivalent language even where the term "letter of acceptance" is not printed. A 2025 Public Services and Procurement Canada tender package for a building roof replacement (25-58130) includes a tender form clause headed "Acceptance and Entry into Contract": the tenderer "undertake[s], within fourteen (14) days of notification of acceptance of my/our offer, to sign a contract for the performance of the work provided I/we are notified, by the Department, of the acceptance of my/our offer within 30 days of the tender closing date." Two mechanics matter for bidders there: the acceptance must be communicated within a stated window (30 days here), and once it is, the bidder has 14 days to execute the contract. The same packages base the construction time on "the date of notification of acceptance," so the LOA — not the later contract signing — starts the clock on performance.

What it means for suppliers

Receiving a letter of acceptance is not a soft signal; it is the point where you are committed. Before submitting a tender, make sure your price, resources and surety arrangements can survive a binding acceptance — because backing out after acceptance forfeits bid security and can expose you to damages or suspension from future bidding. Suppliers should also read the tender's acceptance mechanics closely: how long the offer must stay open for acceptance, what document formally communicates it, and how many days you then get to sign. Related award-stage documents have different jobs — an advance contract award notice (ACAN) merely announces an intent to award to a known supplier, while a letter of acceptance is the actual acceptance of an offer.

Common questions

Is a letter of acceptance the same as the contract?

No. The LOA accepts the offer and binds both sides to enter into the contract; the contract itself is the executed document set (agreement, general and supplemental conditions, drawings and specifications) signed after acceptance. Practically, public buyers issue the letter quickly so work can be scheduled, then complete contract execution within the days-to-sign window the tender set — 14 days is a common federal construction figure.

Does a letter of acceptance create obligations for the buyer too?

Yes. Once the buyer communicates acceptance, its own offer-acceptance is complete and it cannot casually withdraw the award, because the bidder has already given an irrevocable, binding offer through the tender. That symmetry is why Canadian tender disputes often turn on whether an acceptance was actually communicated in the form the solicitation prescribed — the wording and delivery of the award notice can matter legally, not just administratively.

Related definitions

ACAN (Advance Contract Award Notice) · Irrevocable offer · Bid security · Consent of surety