Gibson v. Manchester City Council (1979) Issue: The issue on appeal was whether the defendant's letter of February 1971 was adequately construed as an offer which Gibson accepted or an invitation to treat. Facts: The defendant City Council had adopted a policy of selling council houses to its tenants. The claimant was a tenant of such a council house, who had applied for details of the house he was renting and applicable mortgage terms, using the printed form designated and supplied by the defendant for this purpose. In February 1971, the city treasurer responded to this application stating, 'The [council] may be preparing to sell you the house at the purchase price…' and providing mortgage details. This letter also stated that it did not amount to a 'firm offer' of a mortgage and invited the claimant to make a formal application using an enclosed form. In March 1971, the claimant returned the completed form to the defendant. Following local elections in May of the same year, control of the Council passed from the Conservatives to Labor. The new Labor Council policy was that council houses would not be sold under the previous Conservative policy unless a legally binding contract existed. The defendant refused to sell to the claimant, who brought an action against them in breach of contract. This action was successful at the first instance and the Court of Appeal, upon which the defendant appealed to the House of Lords. Judgement: According to Lord Diplock of the House of Lords, Gibson's claim was invalid since the letter did not constitute an offer. The letter made it clear that it was not intended to be taken as an offer. According to Lord Diplock, it would be against the fundamental tenets of English contract law to for letters to amount to a binding contract. The House of Lords ruled that although there was a signed contract, the defendant was not obligated to sell the land since the Council's letter did not include a price and was more of an invitation than an offer. 1. Based on the case above provide a Conclusion.
Gibson v. Manchester City Council (1979)
Issue: The issue on appeal was whether the defendant's letter of February 1971 was adequately construed as an offer which Gibson accepted or an invitation to treat.
Facts: The defendant City Council had adopted a policy of selling council houses to its tenants. The claimant was a tenant of such a council house, who had applied for details of the house he was renting and applicable mortgage terms, using the printed form designated and supplied by the defendant for this purpose. In February 1971, the city treasurer responded to this application stating, 'The [council] may be preparing to sell you the house at the purchase price…' and providing mortgage details. This letter also stated that it did not amount to a 'firm offer' of a mortgage and invited the claimant to make a formal application using an enclosed form. In March 1971, the claimant returned the completed form to the defendant.
Following local elections in May of the same year, control of the Council passed from the Conservatives to Labor. The new Labor Council policy was that council houses would not be sold under the previous Conservative policy unless a legally binding contract existed. The defendant refused to sell to the claimant, who brought an action against them in breach of contract. This action was successful at the first instance and the Court of Appeal, upon which the defendant appealed to the House of Lords.
Judgement: According to Lord Diplock of the House of Lords, Gibson's claim was invalid since the letter did not constitute an offer. The letter made it clear that it was not intended to be taken as an offer. According to Lord Diplock, it would be against the fundamental tenets of English contract law to for letters to amount to a binding contract. The House of Lords ruled that although there was a signed contract, the defendant was not obligated to sell the land since the Council's letter did not include a price and was more of an invitation than an offer.
1. Based on the case above provide a Conclusion.
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