Parties: Storer v Manchester City Council Case citation: [1974] 1 WLR 1403 Keywords: Objective Approach - Contract - The Point at Which a Contract is Formed Court heard in: CoA (civ) Summary/ Legal reasoning: SUMMARY . the claimant applied to buy his council dwelling under the help to buy scheme of the conservative government · his application was approved, and he signed the papers asked of him and sent them to the town clerk . before the correspondence could be sent back to him the labour party came into power and the help to buy scheme was ceased . defendant held there was no formal contract, claimant was under the impression that a contract had in fact been formed through the correspondence LEGAL REASONING . found there was a binding contractual agreement arising from the correspondence between the parties and the nature of the agreement which was to 'dispense with legal formalities' (1408) for ease of purchase . March 9, 1971, the town clerk wrote o "i understand you wish to buy your council house and enclose the agreement for sale. If you sign the agreement and return it to me I will send you the agreement signed on behalf of the corporation in return." o held that as the claimant filled in the form and returned it, he had done what was required to bind himself to the contract (1407) . 'Subject to contract' - "there is no binding contract until the contracts of sale have been formally exchanged" 1407/8 (eccles v bryant and pollock [1948] Ch. 93. referred to) (Lord Denning MR) o held there is no agreement subject to contract and therefore the only question was if a contract had been concluded (Bigg v Boyd Gibbins Ltd. [1971] 1 WLR 26.) o held a contract had been created upon offer and acceptance
o contract was formed at the point where the claimant returned the agreement to sale to the town clerk (postal rule) . the defendants argued due to a date of commencement not being agreed there was no contract o "There was nothing left for the parties themselves to do but agree the date. Its insertion in the already signed document - in the hands of the common solicitor - could surely be nothing but an administrative tidying up to be done, if at all, at the solicitor's convenience." (Smith v Mansi [1963] 1 WLR 26.) . argued the town clerk had not signed the agreement and therefore there was no agreement o held that due to him signing the original correspondence, the offer of contract, there was sufficient evidence that this was intended to be legally binding . the contrasting views of the claimant (that there were contractual obligations) and the defendant (there were not contractual obligations) were resolved with the objective intention principle from a third-party perspective, it was held that from an outside perspective there was a contract. o "In contracts you do not look into the actual intent in a man's mind.