Parties Involved: The claimant, Mr. Gibson; the defendant, the Council.
Initial Action: The council sent Mr. Gibson a letter indicating potential willingness to sell a council house for £2725.
Requirements: Mr. Gibson was instructed to complete a formal application form if interested in purchasing the house.
Developments
Response by Gibson: Mr. Gibson completed and returned the application form as instructed.
Policy Change: While Mr. Gibson was processing his application, the council changed its policy regarding the sale of council houses.
Outcome: Due to the policy change, the council informed Mr. Gibson that they could not proceed with his application.
Legal Action
Claim by Gibson: Mr. Gibson claimed that the council's letter was an offer which he accepted by submitting the completed form.
Council's Defense: The council asserted that the letter was not intended to create a binding agreement; it merely suggested a possibility of sale should Mr. Gibson make a formal offer.
House of Lords Decision
Key Consideration: The wording of the council's letter was scrutinized, notably the phrase "may be prepared to sell."
Conclusion: The House of Lords emphasized that:
The council's letter was not a firm offer.
It was an invitation for Mr. Gibson to make an application to potentially purchase the house.
The council did not intend to enter a contract through the letter alone.
Implications
Understanding Offers vs. Invitations: This case illustrates the distinction between a true offer and an invitation to treat or negotiate.
Binding Agreements: Highlights the importance of clear intent to form a binding agreement, as opposed to merely opening negotiations or expressing willingness under certain conditions.