Storer V Manchester City Corporation Case Study

753 Words 4 Pages
Q1

Issue:
Whether P.Ramli placed the advertisement in The Star newspaper is an offer or Invitation to treat.

Explanation Law:

An offer is made when one of the parties involved in the negotiation states the terms on which without further alteration, he is ready to be bound into a legally binding,enforceable agreement with the other party once the other party accepts the offer.(Krishnan,2009)An offer should identify the parties to the contract and indicate its contents, example the parties’ rights and duties. However both identification of the parties to a contract and determination of its contents may (and sometimes do) create problems. As for the parties to a contract, the simplest way to avoid any difficulty in their identification is
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It must be made with the intention that it will become binding upon acceptance. There must be no further negotiations or discussions required. The nature of an offer is illustrated and encapsulated by two cases involving the same defendant, Manchester City Council. The Council decided to sell houses that it owned to sitting tenants. In two cases, the claimants entered into agreements with the Council. The Council then resolved not to sell housing unless it was contractually bound to do so. In these two cases the question arose as to whether or not the Council had entered into a contract.
In one case, Storer v Manchester City Council (1974), the Court of Appeal found that there was a binding contract. The Council had sent Storer a communication that they intended would be binding upon his acceptance. All Storer had to do to bind himself to the later sale was to sign the document and return it.
In contrast, however, in Gibson v Manchester City Council (1979), the Council sent Gibson a document which asked him to make a formal invitation to buy and stated that the Council ‘may be prepared to sell’ the house to him. Gibson signed the document and returned it. The House of Lords held that a contract had not been concluded because the Council had not made an offer capable of being accepted. Lord Diplock

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