Contract A/Contract B Theory, originating from procurement law, describes a two-contract system often present in tendering processes. “Contract A” forms when a bidder submits a conforming tender in response to an invitation to treat, creating an implied obligation for the issuer to fairly consider all compliant bids. “Contract B” is the main contract awarded to the selected bidder for the goods or services.
Mechanism
In the context of a crypto Request for Quote (RFQ) system, “Contract A” establishes the terms under which bids are submitted and evaluated, ensuring fairness and adherence to specified rules, even if these rules are codified in smart contracts for automated execution. The successful bid then leads to the formation of “Contract B,” representing the actual trade, options execution, or service agreement on-chain or via institutional off-chain agreements. This structure provides a legal basis for the bidding process.
Methodology
This theory provides a framework for structuring competitive bidding processes, ensuring that the initial interaction (RFQ submission and acknowledgment) creates binding procedural duties on the part of the issuer. It mandates a systematic and equitable evaluation of all conforming proposals before the primary contractual relationship for the transaction or service is established. This bolsters trust and transparency in crypto procurement mechanisms.
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