CONTRACT LAW 4 - Offer & Acceptance - REQUIREMENTS FOR A VALID OFFER

Question 1

What did the GIBSON V MANCHESTER CITY COUNCIL 1979 demonstrate? (5)

Answer 1

It demonstrates that an offer must be clear and certain.
The city treasurer wrote to a tenant saying the council ‘may be prepared to sell the house to you at the purchase price of £2,725 and if you would like to make a formal application please complete the form and return it.’
The tenant completed and returned the form but the council then changed its policy on the sale of council houses and the tenant was advised the council was unable to proceed with his application.
Decision was held by the house of lords.
There was no binding contract because there was never an offer made by the council, the letter stated it ‘may be prepared to sell’.
Therefore it was not sufficiently clear and certain enough to be an offer.

Question 2

How did the case of GIBSON V MANCHESTER CITY COUNCIL 1979 demonstrate that an offeror must show an intention to be legally bound? (2)

Answer 2

The council’s wording was ‘may be prepared to sell’ was deemed to lack the requisite intention to be legally bound.
However in STORER V MANCHESTER CITY COUNCIL the wording ‘if you will sign the agreement and return it to me I will send you the agreement’ did demonstrate an intention to be legally bound.