Eu Law

Contract Law Revision – Cases

Offer and Acceptance – Chapter 2

* Assessing contractual intent > Storer v Manchester City Council (1974)

* Facts: earlier case also involving a council tenant's right to buy his property

* D sent P a document titled Agreement for Sale and a letter which stated: If you will sign the Agreement and return it, I will send you the Agreement signed on behalf of the council in exchange

* P signed and returned the Agreement for Sale

* Labour party took control of the council and did not return a signed copy, refusing to sell the property

* P sued for breach of contract

HELD:

There was a binding obligation on D to sell

Lord Denning: In contracts you do not look into the actual intent in a man's mind. You look to what he said and did. A contract is formed when there is, to all outward appearances, contract. A man cannot get out of a contract by saying 'I did not intend to contract' if by his words he has done so... objectively, to a reasonable man D's letter appeared to commit to selling the property if P returned the documents

> Gibson v Manchester City Council (1979)

Facts:

* P was a council tenant and received a letter from D inviting an application to buy the council house

* D's letter stated:  The Corporation may be prepared to sell the house to you at the purchase price of £2,725... If you would like to make formal application to buy your Council house, please complete the enclosed application form...

* P completed the application

* D was a newly elected council and refused to accept P's application

* P sued for breach of contract

HELD:

Held that D's letter was not a contractual offer, which P could accept formal application by P was an offer, that D did not accept

Lord Diplock: The words 'may be prepared to sell' are fatal... [D's letter is] setting out the financial terms on which it may be the council will be prepared...