is an

English contract law English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries ...

case in which the

House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...

strongly reasserted that agreement only exists when there is a clear offer mirrored by a clear acceptance.

Facts

Manchester City Council Manchester City Council is the local authority for Manchester, a city and metropolitan borough in Greater Manchester, England. Manchester is the sixth largest city in England by population. Its city council is composed of 96 councillors, three ...

was being run by the

Conservative Party The Conservative Party is a name used by many political parties around the world. These political parties are generally right-wing though their exact ideologies can range from center-right to far-right. Political parties called The Conservative P ...

, which was operating a policy of selling council houses to the occupants. Mr Gibson applied, on a form of the council, for details of his house price and

mortgage A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any pu ...

terms. In February 1971, the Treasurer replied:

The corporation may be prepared to sell the house to you at the purchase price of £2,725 less 20% = £2,180 (
freehold Freehold may refer to: In real estate *Freehold (law), the tenure of property in fee simple *Customary freehold, a form of feudal tenure of land in England *Parson's freehold, where a Church of England rector or vicar of holds title to benefice p ...
)… This letter should not be regarded as a firm offer of a mortgage. If you would like to make formal application to buy your Council house please complete the enclosed application form and return it to me as soon as possible.

In March 1971, Mr Gibson completed the application form with the exception of the date on which his

lease A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...

was to end, and returned it to the council. The Labour Party returned to power in Manchester in the May 1971 election, and halted new sales. Mr Gibson was told that he could not complete the purchase. He then sued the council, arguing that a binding contract had already come into force.

Judgment

Court of Appeal

In the

Court of Appeal A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of t ...

Lord Denning Alfred Thompson "Tom" Denning, Baron Denning (23 January 1899 – 5 March 1999) was an English lawyer and judge. He was called to the bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 when ...

MR held that there was a contract, because one should "look at the correspondence as a whole and at the conduct of the parties and see there from whether the parties have come to an agreement on everything that was material".

Geoffrey Lane Geoffrey Dawson Lane, Baron Lane, (17 July 1918 – 22 August 2005) was a British Judge who served as Lord Chief Justice of England from 1980 to 1992. The later part of his term was marred by a succession of disputed convictions. Lane's criti ...

LJ dissented, and would have held there was no contract. The council appealed.

House of Lords

The

unanimously upheld the council's appeal, so Mr Gibson did not get his house. The court held that the council's letter was not an offer, for the letter stated that "The Corporation may be prepared to sell the house to you" and that "If you would like to make formal application to buy your Council house, please complete the enclosed application form and return it to me as soon as possible." As there was never an offer available to be accepted, no contract had been formed and by extension the Council had not been in breach.

Lord Diplock William John Kenneth Diplock, Baron Diplock, (8 December 1907 – 14 October 1985) was a British barrister and judge who served as a lord of appeal in ordinary between 1968 and until his death in 1985. Appointed to the English High Court in ...

said the following: Lord Russell of Killowen agreed, and stated: {{Cquote, My Lords, I cannot bring myself to accept that a letter which says that the possible vendor "May be prepared to sell the house to you" can be regarded as an offer to sell capable of acceptance so as to constitute a contract. The language simply does not permit such a construction. Nor can the statement that the letter should not be regarded as a firm offer of a mortgage operate to turn into a firm offer to sell that which quite plainly it was not.

External links

(08 March 1979) English agreement case law House of Lords cases 1979 in British law 1979 in case law Manchester City Council 1970s in Manchester

Facts

Judgment

Court of Appeal

House of Lords

See also

External links