Gibson v Manchester City Council PDF

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Q. Was the decision of the House of Lords in Gibson v Manchester City Council justified? Compare and contrast with Lord Denning’s earlier decision in the Court of Appeal. Ans. I would like to start my essay with the facts of the Gibson’s case. Secondly, I would like to discuss the judgement made by ...

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Q. Was the decision of the House of Lords in Gibson v Manchester City Council justified? Compare and contrast with Lord Denning’s earlier decision in the Court of Appeal.

Ans. I would like to start my essay with the facts of the Gibson’s case. Secondly, I would like to discuss the judgement made by the Supreme Court. After that I will compare the judgement with the Court of Appeal. Additionally, some other cases will also be examined such as Storer, Carlill, Lefkowite.

In the particular case of Gibson v Manchester City Council (1978), the council advertised details of a scheme for tenants to buy their council houses. Gibson filled in a form from the council that meant he ‘may’ be able to get a mortgage to buy his council house off the council. Following further negotiation, Gibson asked the council to proceed with the purchase. The council removed Gibson from their list of tenants. Following a political change to the Labour Party, the sale was halted. Gibson was told that he could not complete the purchase. He then sued the council, arguing that a binding contract had already come into force. In the Court of Appeal, Lord Denning held that there was a contract. He stated that 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". However, Geoffrey Lane LJ differed from Lord Denning as he said that there was no contract at all. The council appealed. The matter was taken to the House of Lords where it unanimously upheld the council’s appeal. As a result, Gibson did not get the house. The court held that the council's letter was not an offer, for 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.

There was much criticism for the judgement. The House of Lords used the traditional mirror approach in Gibson’s case, which was criticized by Lord Denning as he was of the view that it was out-of-date. He stated that, “to my mind it is a mistake to think that all contracts can be analyzed into the form of offer and acceptance”. Lord Denning adopts a two stage approach. The first stage that it must be decided that whether a contract has been concluded. Secondly it must be decided what the terms of the contracts are. The approach by Lord Denning clearly conflicts with the mirror image approach to contractual formation. The mirror image means that a clear and unequivocal offer must be matched with an equal clear and unequivocal acceptance. This is the traditional approach. Lord Denning was criticized for his two stage approach. As this approach produces uncertainty and gives too little guidance to the courts on determining whether or not an agreement has been reached.

Moving on to other cases, In the case of Storer (1974) the MCC sent Storer 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”. The Storer 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. As a result, the Storer sued for breach of contract. The court held that a binding contract had been concluded. The Council’s intention was to become contractually bound when Storer had signed the Agreement and returned it, particularly as there was definite language used in the correspondence and there was a clear offer and acceptance. Comparing the case of Storer with that of Gibson’s. In Gibson, the council and Gibson were only at the stage of negotiating the contract and they indicated they may sell Gibson the property; i.e. the language used indicated there wasn't a contract. However, in Storer, an agreement of sale was signed which included mortgage details and in these circumstances an offer had been made.

Furthermore, in the case of Carlill. A company offered a reward of 100 pounds to anyone who used the Smoke Ball remedy and contracted the flu. Once aware of the offer, Carlill accepted the offer when he purchased the Smoke Ball remedy and completed the prescribed course. Upon contracting the flu, he became eligible for the reward. Therefore, the company's offer to pay 100 pounds "in return for" the use of the Smoke Ball remedy and guarantee not to contract the flu was performed by Carlill. In Carlill’s case, the issue was that, was an advertisement an offer? The case established that advertisements can constitute an offer to the public at large and can be worded to waive the need to communicate acceptance prior to a claim. Rewards are unilateral contracts where the promisor is bound to perform his promise if the other party performs the required act. In contrast to a bilateral contract where one party offers a promise in return for the promise of the other.

Additionally, the case of Lefkowitz was an American case. In this case the following advertisement was put in the newspaper,” Saturday 9 A.M. Sharp 3 Brand New Fur Coats Worth to $100.00. First Come First Served $1 Each. Lefkowitz was the first person to come into the store but D refused to sell to him. The court held that the wording was sufficiently precise and there would be no issues of limited supply, as only three coats were advertised as available. And advertisement was found to be an offer and Lefkowitz had accepted it by being the first person to come into the store....