Gibson vs Manchestor City Council Case

Topics: Contract, Offer and acceptance, Labour Party Pages: 5 (1398 words) Published: January 10, 2013
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Gibson v Manchester City Council
From Wikipedia, the free encyclopedia

Gi bson v Manchest er Ci t y Counci l [1979] UKHL 6
( is
an English contract law case in which the House of
Lords strongly reasserted that agreement only exists
when there is a clear offer mirrored by a clear

1 Facts
2 Judgment
2.1 Court of Appeal
2.2 House of Lords
3 See also
4 Notes

Gibson v Manchester CC


Hous e of Lords

Citation(s ) [1979] UKHL 6
(http://w w w . bailii. org/uk/c as es /UKHL/1979/6. html)
, [1979] 1 WLR 294, [1979] 1 All ER 972
Cas e his tory
action(s )

[1978] 1 WLR 520
Cas e opinions

F ac t s

Lord Diploc k
Ke ywords

Manchester City Council was being run by the
Agreement, offer, ac c eptanc e, invitation to treat
Conservative Party, which was running a policy of
selling council houses to the occupants. Mr Gibson
applied for details of his house price and mortgage terms on a form of the council. 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)… 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, except for the purchase price and returned it to the council. In May, the Labour party came back to power and halted sales. Mr Gibson was told that he could not complete the purchase. So Mr Gibson sued the council, arguing that a binding contract had already come into force.

Court of Appeal
Lord Denning 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 LJ dissented, and would have held there was no contract. The Council appealed. e n .wi ki p e d i a .o rg /wi ki /Gi b so n _ v_ M a n ch e ste r_ Ci ty_ Co u n ci l

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Hous e of Lords
The House of Lords 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 as 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 said the following

Lord Justice Geoffrey Lane in a dissenting judgment, which for my part I find convincing, adopted the conventional approach. He found that upon the true construction of the documents relied upon as constituting the contract, there never was an offer by the corporation acceptance of which by Mr. Gibson was capable in law of constituting a legally enforceable contract. It was but a step in the negotiations for a contract which, owing to the change in the political complexion of the council, never reached fruition. My Lords, there may be certain types of contract, though I think they are exceptional, which do not fit easily into the normal analysis of a contract as being constituted by offer and acceptance; but a contract alleged to have been made by an exchange of correspondence between the parties in which the successive communications other than the first are in reply to one another, is not one of these. I can see no reason in the instant case for departing...
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