Requirements of a valid offer

Question 1

What does Gibson v Manchester City Council [1979] 1 WLR 294 tell us about the importance of the certainty of an offer and the intention to be bound?

Answer 1

That an offer must be clear and certain. In this case, the House of Lords held that there was no binding contract because there was never an offer made by the Defendant. The Defendant’s letter was no sufficiently clear and certain to be an offer, indicated by the use of the phrase ‘may be prepared to sell’. It was merely the first step in negotiations, lacking the requisite intention to be legally bound.

Question 2

How can the above case be contrasted with Storer v Manchester City Council [1974] 1 WLR 1403 with respect to the intention to be bound?

Answer 2

In this case, the wording used was ‘if you will sign the agreement and return it to be I will send you the agreement signed on behalf of the corporation in exchange’. The emphasis here is in ‘I will’ which demonstrates a clear intention to be bound.

Question 3

Define unilateral and bilateral contracts.

Answer 3

Unilateral contracts are when one party makes an offer or proposal in terms which call for an act to be performed by one of more patterns. a unilateral contract does not involve mutual promises – only the party making the offer assumes an obligation. Only actual performance of the required act will constitute acceptance.
* The best example of this would be when someone makes an offer for specific lost property to be returned in exchange for a reward.

Bilateral contracts are when each party assumes an obligation to the other party by making a promise to do something, such as to sell an item to the other party in exchange for a payment. The offer can be accepted by an unequivocal communication of acceptance, at which point each party would be bound to do what it promised to do.