Gibson v Manchester City Council [1979] UKHL 6 (08 March 1979)

Material facts:

Manchester city council adopted a policy to sell council houses to tenants. Gibson wrote to the council requesting information on the price and terms of mortgage. Manchester City Council replied Gibson stating that the city council “may be prepared to sell the house …” to Gibson at a specified price. The reply from the City Council also mentioned that the letter should not be regarded as a firm offer. A change in the administration of the City Council led to the cancellation of the policy, and the consequent refusal to sell to Gibson. Gibson sued for breach of contract and for an order of specific performance.

Procedural History:

At the trial court, the court held that the City Council’s letter constituted a valid offer and ordered specific performance. The City Council appealed the ruling.

Issue:

1. Whether or not the letter addressed to Mr. Gibson by Manchester City Council constituted an offer or an invitation to treat.

Holding:

1. The House of Lords held that the letter addressed to Mr. Gibson by Manchester City Council was a mere invitation to treat.

Ratio Decidendi:

The House of Lords stated that words like “may be prepared to sell to sell…” as contained in the mortgage addressed to Mr. Gibson were too ambiguous to be final and hence cannot constitute an offer. Further, it was clearly stated in the mortgage letter that it is not a firm offer.

Comments:

What are your comments on the case and the ruling?