Gibson v Manchester City Council
| Gibson v Manchester CC | |
|---|---|
 |
|
| Court | House of Lords |
| Citation(s) | [1979] UKHL 6, [1979] 1 WLR 294, [1979] 1 All ER 972 |
| Case history | |
| Prior action(s) | [1978] 1 WLR 520 |
| Case opinions | |
| Lord Diplock | |
| Keywords | |
| Agreement, offer, acceptance, invitation to treat | |
Gibson v Manchester City Council [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 acceptance.
Manchester City Council was being run by the 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 date which his lease was to end, and returned it to the council. In May, the Labour party came back to power and halted new 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.
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..
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
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 from the conventional approach of looking at the handful of documents relied upon as constituting the contract sued upon and seeing whether upon their true construction there is to be found in them a contractual offer by the corporation to sell the house to Mr. Gibson and an acceptance of that offer by Mr. Gibson. I venture to think that it was by departing from this conventional approach that the majority of the Court of Appeal was led into error.
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