Examination Timing: 00H00M47S
Emily rents a house from Robert, who wrote to inform her that he might be willing to sell it to her. Emily responded with a letter expressing her desire to proceed with the acquisition. However, Robert later decided not to sell the house and informed Emily that the option to buy was no longer available. Emily claims a breach of contract because Robert refuses to proceed with the sale.
Was there a binding contract, and can Emily enforce the sale?
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The language used by Robert in his letter to Emily was not sufficiently definite to constitute an offer; it was merely an invitation to treat. In Gibson v Manchester City Council [1979] 1 WLR 294, the House of Lords held that an indication of willingness to negotiate or an invitation to treat does not constitute an offer capable of acceptance. Robert's communication to Emily did not demonstrate a clear intention to be bound by the terms of a sale but rather indicated the possibility of negotiations. Therefore, there was no binding contract formed, and Emily cannot enforce the sale.
Key Point: In English contract law, a clear distinction is made between an offer and an invitation to treat. An offer must demonstrate a clear intention to be bound upon acceptance, whereas an invitation to treat is merely an indication of willingness to negotiate, which cannot form the basis of a binding contract. This principle ensures clarity in contractual negotiations and prevents parties from being bound by mere preliminary discussions.
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