Gibson v Manchester City Council (1979) 1 All ER 972, (1979) 1 WLR 294, HL

In November 1970, the Conservative run Manchester City Council (MCC) sent out brochures outlining their scheme to sell council houses. If recipients of the brochures wanted further information they were to return a form attached to the brochure. Mr Gibson did precisely this. Afterwards he received an application form and a letter on February 16th 1971 stating that the MCC may be willing to sell him a council house at a price of £2,180.

The letter asked Mr Gibson to make a formal application on the form provided - which he did. In May 1971, the council changed hands and Labour came to power and promptly reversed the policy of selling council houses, only completing those deals in which an exchange of contracts had taken place.

Mr Gibson was told that because his transaction had not reached the stage of exchanging contracts, the council was no longer prepared to sell him a council house.

Mr Gibson tried to argue that they were bound to sell on the grounds that the letter of Feb 16th, 1971 from the Council constituted an offer which he had accepted when he completed the formal application.

It was held that no binding contract had come into existence. The most that could be said about the council's letter of Feb 16th was that it represented part of the negotiations where the parties were feeling their way towards an agreement. It lacked the unequivocal nature of a true offer.

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