Postal

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Communication of Acceptance
Acceptance must be communicated by the offeree or somebody who is authorised by the offeree.

Operation of Postal Rule

When contracting parties are bargaining at a distance, typically via mail, problem may arise because the parties could not know at the same time whether they had formed a contract. Therefore, a general rule indicating the time of an effective acceptance was established. The postal rule was created for convenience and certainty. It is an exception to the general rule.

As established in Adams v Lindsell (1818), where acceptance is complete as soon as the letter of acceptance is posted. The rule for the post is that acceptance is effective even if the letter is delayed, destroyed or lost in the post so that it never reaches the offeror.

The poster rule applies when acceptance by post has been requested or where it is an appropriate and reasonable means of communication between the parties.

The postal rule does not apply where the means of communication are immediate.

The ‘postal rule’ was confirmed in Household Fire and Carriage Accident Insurance Co v Grant (1879),

Although the postal rule does give a clear definition of acceptance and provide certain degree of convenience, with the evolution of quicker forms of communication such as e-mail and telephone, it becomes less likely that the parties will contemplate a postal acceptance. With the risk and potential unfairness, it seems that postal rule may be out-of-date and other types of communications of acceptance deem more appropriate.
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