Friday, December 14, 2012

Gibson v Manchester City Council case brief

Gibson v Manchester City Council
 

Facts
Conservative ruling party of Manchester City Council had a policy of selling council houses to tenants.
-After the elections, the Labour Party gained control of the council, repealing selling policy.  The Labor Party however agrees to honor all previous agreements.
-Gibson was in the negotiating stage and gave a letter from council that they “may be prepared to sell at a price of 2,725 less 20% freehold” stating that the letter was not a firm offer of a mortgage. -Gibson was invited to make formal application for purchase and to fill in form.
-Gibson c
ompletes and returns form, leaving the price blank due to repairs which are needed on the house.
-Council states that they took repairs into fixing the price, Gibson asks for process to continue.

Issue:
Do the words “may be willing to sell” consist of a contract?

Rules:
"May be willing to sell" did not constitute an offer from the council, and so no binding contract had yet been formed.
-The processes of negotiations must be distinguished from the actual establishment of a contract

Analysis:
Since the council’s reply did not consist of an affirmative statement declaring a contract, and instead uses the wording of “may be willing to sell”, no contract was established.
-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.
 

Conclusion:
-No contract was held since the traditional approach of offer and acceptance is preferred.


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