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 is the upper house of the Parliament of the United Kingdom. Like the lower house, the House of Commons of the United Kingdom, House of Commons, it meets in the Palace of Westminster in London, England. One of the oldest ext ...

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 government in England, local authority for the City status in the United Kingdom, city of Manchester in Greater Manchester, England. Manchester has had an elected local authority since 1838, which has been re ...

was being run by the Conservative Party, 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 (legal system), civil law jurisdictions 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 t ...

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)... 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 An appellate court, commonly called a court of appeal(s), appeal court, court of second instance or second instance court, is any court of law that is empowered to Hearing (law), hear a Legal case, case upon appeal from a trial court or other ...

Lord Denning Alfred Thompson Denning, Baron Denning, (23 January 1899 – 5 March 1999), was an English barrister 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 he w ...

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.

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:

References

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External links