After completion of this lesson, students will be able to: a) define offer and invitation to treat b) distinguish between the judgments provided in Gibson and Storer Case

1. Offer &
Acceptance
Preeti Kana Sikder
Assistant Professor
Department of Law & Justice

2. Contents of Current Chapter
• Rules of law relating to offer
 Elements of Offer
 Distinction between offer and invitation to treat
 Identifying offers in everyday transactions
 Termination of offer
• Rules of law relating to Acceptance
 Elements of Acceptance
 Communication of Acceptance
 Prescribed Method of Acceptance
 Exceptions to the rule requiring communication of acceptance

3. What is an ‘offer’?
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 person to whom it is addressed.

4. Under the objective test
of agreement, an
apparent intention to be
bound may suffice,
even though in fact he
has no such intention.
Has an agreement
been reached?

5. Manchester City Council: the local government authority for
Manchester, a city and metropolitan borough in Greater
Manchester, England

6. Gibson v Manchester
City Council (1978)

7. The Decisions
• The Trial Judge and the Court
of Appeal held that a contract
had been concluded.
• Lord Denning held that there
was an agreement between the
parties on all material points,
even though precise formalities
had not been gone through.
• House of Lords held that no
contract had been
concluded.
• The letter written by the
treasurer, which stated that the
council may be prepared to
sell, was not an offer itself.
• It was simply an expression of
their willingness to enter into
negotiations for the sale of the
house

8. Offer
• A statement by one party
of a willingness to enter
into a contract on stated
terms, provided that these
terms are, in turn,
accepted by the party or
parties to whom the offer
is addressed
Invitation to Treat
• An expression of
willingness to enter
into negotiations
which, it is hoped, will
lead to the conclusion
of a contract at a later
date.

9. Storer v Manchester
City Council (1974)
In 1970 the defendant city council, which was then controlled by the
Conservative Party adopted the policy of selling council houses
to sitting tenants.

10. The Conservative and Unionist Party

11. Storer v Manchester City Council
(1974)
• The council instructed the town clerk to
devise a simple form of agreement
enabling sales to take effect at the earliest
possible date with the object of dispensing
with legal formalities

12. Storer v Manchester City Council
(1974)
• The plaintiff applied to buy the council house which he was renting, with a
mortgage loan from the council.
• The application was approved by the city treasurer.
• the town clerk, in a letter dated 9 March 1971, wrote to the plaintiff: ‘I
understand you wish to purchase your Council house and enclose the
Agreement for Sale. If you will sign the Agreement and return it to me I will
send you the Agreement signed on behalf of the [council] in exchange.’

13. Storer v Manchester City Council
(1974)
• The plaintiff filled in the name of his solicitors and, on 20 March, he
signed the agreement and returned it to the council.
• Before the town clerk had signed the agreement on behalf of the
council and sent the council’s part of the agreement to the plaintiff, there
was an election and the Labour Party gained control of the council.
• Under Labour control the council resolved to discontinue selling council
houses.

14. The party's platform emphasises greater state
intervention, social justice and strengthening
workers' rights

15. Guesses on the
decision?

16. Storer v Manchester City Council
(1974)
• It was held that a binding contract for the sale of the house
had been concluded by offer and acceptance when the
plaintiff accepted the offer to sell contained in the letter of 9
March by signing the agreement for sale and returning it to
the council.
• So, the negotiation had advanced beyond the stage reached
in Gibson but had not resulted in an exchange of contracts.

17. Storer v Manchester City
Council (1974)
It was the council’s intention (having regard to their instructions to
devise a simple form of agreement and to the terms of the actual
agreement sent to the plaintiff and the accompanying letter of 9
March) that the council would become contractually bound when
the plaintiff had signed the agreement and returned it.
The letter of 9 March signed by the town clerk constituted a
sufficient note or memorandum of the agreement.

18. Observation
• In both of these cases it has been proved that
judges can and do differ in the results which they
reach in interpretive exercise of determining an
offer.
• It has also been proved that such interpretation
must ultimately rest on its own facts.

19. The distinction between offer and
invitation to treat is primarily one of
‘intention, that is, did the maker of the
statement intend to be bound by an
immediate acceptance, or did he only
intend his statement to be a part of
the continuing negotiation process?

20. Prima Facie Rules of Law
(rules accepted as correct
until proved otherwise)
There are certain stereotyped situations in which the distinction
between offer and invitation to treat is determined by rules of law.

21. Prima Facie Rules of Law
(rules accepted as correct
until proved otherwise)
It may be possible to displace these rules by evidence of contrary
intention, but in absence of such evidence they will determine the
distinction between offer and invitation to treat, without reference to the
intention within

22. Most Commonly Encountered Examples of
such rules
• Shop Display
• Advertisements of unilateral contracts
• Advertisements of bilateral contracts
• Auction Sales
• Timetables and Passenger tickets
• Tenders
• Sales of shares

23. Thank You