Storer v Manchester City Council
Court of Appeal
Citations: [1974] 1 WLR 1403; [1974] 3 All ER 824; (1974) 118 SJ 599; [1974] CLY 3932.
Facts
A Conservative party-controlled company decided to sell council houses to their tenants for favourable rates. To help tenants purchase without the need for full legal formalities, they created a standard application form for tenants to use.
The claimant applied using the form, asking to purchase the house with a mortgage. The city treasurer wrote back to the claimant, stating that the company would lend the claimant the full amount and enclosing a sale agreement. The letter instructed the claimant to sign the agreement and send it back, whereupon the company would send the claimant the version of the agreement they signed. The claimant duly did so. However, he failed to fill in a blank space in the agreement which specified the date on which the sale would be complete.
Before the company could write back to the claimant, the Conservatives lost the local elections to the Labour party. This placed the company under Labour control. The Labour party opposed the sale of council houses, so the city wrote to the claimant stating that they would not be proceeding with the sale.
The claimant argued that there was already a completed contract. Accordingly, they sued for specific performance of the sale. The company argued that there was no completed contract until the agreements had been signed and exchanged (this being the usual practice in land sale). They also argued that any contract was void for uncertainty, because the claimant left the date clause blank.
Issue(s)
- Was there a concluded contract?
- Did the fact that the date clause was blank render any contract uncertain?
Decision
The Court of Appeal held in favour of the claimant. The company’s scheme was objectively designed to dispense with the usual formalities associated with land sale. In light of this, the city treasurer accepted the claimant’s offer to buy the house when wrote back. This was not a case in which the parties had implicitly or explicitly agreed that their arrangement would be ‘subject to contract’. There was therefore no need for an exchange of contracts. The date clause was merely of administrative concern, so its absence did not affect the contract’s validity.
This Case is Authority For…
The failure to fill in an unimportant term of the contract will not render it void for uncertainty.
Other
Lord Denning noted that when assessing whether there is intention to be legally bound, the court must look at what the parties objectively appeared to have intended. What they subjectively intended is irrelevant.
