In the common law to speak of the outcome of consenting minds or, even more mystically of consensus ad idem is to mislead by adopting an alien approach to the problem of agreement. The function of an English judge is not to seek to satisfy some elusive mental element but to ensure, as far as practical experience permits that the reasonable expectations of honest men are not disappointed.


DUE DATE: 17TH DEC 2002.

It is a long established principle in English law that people should be free to make any contract they wish. There are obvious exceptions but they do not concern us here.

The problem arises when performance of contractual obligations does not occur in the manner one or other or indeed both parties claim to have envisaged. The law is then called on to judge not only the nature of the contract to which the parties believe themselves bound, but often whether a contract exists at all.

If people may contract on what they wish, it follows that for a contract to be enforced, the parties must have agreed to contract. In defining agreement the common law has often referred to “consensus ad idem,” a meeting of minds. In other words the law has traditionally said it must be shown the contracting parties intended to be bound to the same thing.

However long held this doctrine in England, there is an equally long held understanding of the problem in establishing consensus ad idem.  It is clearly expressed by Chief Justice Brian, when he said in 1478, “the intent of a man cannot be tried, for the devil himself knows not the intent of a man” .

Judges therefore take an objective view of agreement, classically summed up in the case of Smith v Hughes by Blackburn J, who said:

“If whatever a man’s real intention be, he so conducts himself that a reasonable man would believe he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had agreed to the other party’s terms.”

It is this case which judges find their authority to search for evidence of intention in words and writing, and also in actions.  

On closer inspection however, the court in fact, often rejects the notion of looking at all facts surrounding contract cases, looking for agreement only in the framework of offer and acceptance.

Reliance on both the objective approach and the formula of offer an acceptance is illustrated in the case of Gibson v Manchester City Council.

In this the court was asked whether the sale of a council house had been agreed. The evidence showed letters from the council offering terms and conditions, and indeed a price, on which they “may” have considered the sale. The claimant’s letters questioned the terms, and then asked for his application to buy to be considered. Subsequent to this correspondence and before any other the claimant incurred expenses by repairing the house. For political reasons the council then halted any sales of council houses on which a sale had not been agreed.

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It was held that on the facts of the correspondence, the claimant’s reliance was not relevant, even as evidence of his innermost intention to buy, nor was the council’s initiation of the correspondence of their innermost intention to sell.  The only question was whether there had been offer and acceptance.

The House of Lords took the view that in using the term “may” the council made clear they were willing to enter into negotiations rather than offering to sell.  This meant there were no offer to be accepted and therefore no contract.

Lord Denning in ...

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