Whether a contract has been made
A newly elected city Council refused to proceed with the sale of a dwelling and premises to a sitting tenant, the plaintiff. The sale had been arranged by the previous Council. The plaintiff had signed the form sent to him by the council, and only the date when lease would be regarded as having ceased and mortgage payments would commence was left open on the form. The lower court had decided that intention to bind was there, and that filling in the date was a mere administrative formality; a firm offer was there.
Held: The decision was upheld. An offer is an expression of willingness to contract on specified terms, made with the intention that it is to become binding as soon as it is accepted by the offeree.
Parties to negotiations may, by their words and conduct, make it clear that they do intend to be bound even though there are other terms yet to be agreed, but where a binding agreement is alleged to have come into existence after oral and/or written communications between the parties over a period of time, the communications alleged to constitute the agreement must be considered in the light of the other exchanges and not in isolation.
The legal rights and obligations of the parties turn upon what their words and conduct would reasonably be understood to convey, and not upon their actual beliefs or intentions.
Lord Denning MR said: ‘In contracts you do not look into the actual intent in a man’s mind. You look at what he said and did. A contract is formed when there is, to all outward appearances, a contract. A man cannot get out of a contract by saying ‘I did not intend to contract’ if by his words he has done so. His intention is to be found only in the outward expression which his letters convey. It they show a concluded contract, that is enough.’
Stephenson LJ, Lord Denning MR
[1974] 1 WLR 1403, [1974] 3 Alll ER 824
England and Wales
Cited by:
Cited – Gibson v Manchester City Council HL 8-Mar-1979
The plaintiff sought specific performance of what he said was a contract for the sale of land.
Held: The appeal succeeded. In a case where a contract is alleged to have been made by an exchange of correspondence between the parties, in which . .
Applied – Gibson v Manchester City Council CA 1978
The parties disputed which terms of a contract applied.
Held: Lord Denning MR rejected the conventional approach of looking to see whether upon the true construction of the documents relied upon there can be discerned an offer and acceptance: . .
Lists of cited by and citing cases may be incomplete.
Land, Contract
Leading Case
Updated: 09 November 2021; Ref: scu.272801
