CONTRACT LAW

TUTORIAL 2
AGREEMENT CASE ANALYSIS

1a. House of Lords decision was that they allowed the appeal
1b. Affect was that they reversed the distinction
2. There was not a conventional approach so theres no legally binding offer
3a. The conventional approach is normal analysis of a contract as being
constituted by offer
and acceptance;
3b. the justifications departing from this approach; My Lords, there may be
certain types of contract, though I
think they are exceptional, which do not fit easily into the
normal analysis of a contract as being constituted by offer
and acceptance; but a contract alleged to have been made
by an exchange of correspondence between the parties in
which the successive communications other than the first
are in reply to one another is not one of these. I can see no
reason in the instant case for departing from the conventional
approach of looking at the handful of documents relied
on as constituting the contract sued on and seeing whether
on their true construction there is to be found in them a contractual
offer by the council to sell the house to Mr Gibson
and an acceptance of that offer by Mr Gibson. I venture to
think that it was by departing from this conventional approach
that the majority of the Court of Appeal was led into
error.

4. it is impossible to construe the offer because there is no clarity in the

language used. Simply an invitation to treat
5. It is unnecessary to consider
whether the application form and Mr Gibson's letters
of 5 and 18 March 1971 are capable of amounting to
a contractual offer by him to purchase the freehold
interest in the house at a price of 2,180 on the

CONTRACT LAW
TUTORIAL 2
AGREEMENT CASE ANALYSIS

terms of an open contract, for there is no suggestion

that, even if it were, it was ever accepted by the
council. Nor would it ever have been even if there
Page 15
had been no change in the political control of the
council, as the policy of the council before the
change required the incorporation in all agreements
for sale of council houses to tenants of the conditions
referred by Lord Denning MR in his judgment
and other conditions inconsistent with an open contract.

I therefore feel compelled to allow

6. I am not, however, with Geoffrey Lane LJ
in treating Mr Gibson's letter of 5 March 1971 (regarding
non-repair of his tarmac paths) as a counter-offer which had
the effect of destroying an offer to sell, if the council had
made one. On the contrary, I read it as merely exploratory of
the possibility of a reduction in price in the eventuality indicated.
In other words, this case is like Stevenson v McLean
Page 22
and unlike Hyde v Wrench. But that point is of no practical
importance in this appeal, for, even had there been an offer,
I hold that counsel for the council was right in submitting that
there followed no acceptance, but nothing more than an application
to buy at an unstated price, coupled with an application
for a loan.

7.