Postal Rule

Topics: Contract, Contract law, Contractual term Pages: 10 (3205 words) Published: August 13, 2012
In the modern world, technology had improved, the advance technology had led to a convenience life, and people can easily receive and send out a message and even a contract. The purpose of this research essay is to explain the detail of postal rule. The brief definition of postal rule is a rule of contract law that makes an exception to the general rule that an acceptance is only created when communicated directly to the offeror ( n.d). The postal rule was established in the case of Adams v Lindsell . This essay also will show weather the postal rule should or should not be continue, and the rules and method to determine the timing of acceptance sent by fax and email. Discussion of Findings

Postal rule are being use of the modern technology style of communication of acceptance, which leads to exception to the general rule that acceptance has to been done by face to face between offeree and offeror. This applies under a situation that a sender may mail an acceptance to a recipient inbox; in fact, the acceptance never reaches the recipient. If the parties between the sender and recipient loses or delays the acceptance mail, there is still a binding of contract. The following cases which applied to this rule. In Henthorn v Fraser , this case had noted “Where the circumstances are such that it must have been within the contemplation of the parties that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of an offer, the acceptance is complete as soon as it is posted." If the sender had delivery the acceptance not by the method that the recipient had decided and the sender had knowledge and accept this as the method of delivery, there will be no binding of contract. There is no alternative ways. Next, the postal rule was state that there will be an acceptance even it wasn’t brought to the offeror’s attention. Since the acceptance was posted, postal rule will be applied. In a result, the court will have others opinion to decide which rule to applied. This following case would apply to the rule. In Household Fire & Carriage Acident Insurance Co. v. Grant , in this case, post office is the party between sender and recipient. The circumstances in this case were “If the post office be such common agent, then it seems to me to follow that, as soon as the letter of acceptance is delivered to the post office, the contract is made complete and final and absolutely binding as if the acceptor had put his letter into the hands of a messenger sent by the offerer himself as his agent to deliver the offer and receive the acceptance." In additional, postal rule do not apply when the contract had express specified terms. In Holwell Securities v. Hughes , Hughes granted Holwell an option to purchase his premises. This option will practice 'by notice in writing' within 6 months. Holwell was posted an acceptance 5 days before the expiry date, but Hughes did not receive the letter. Holwell sought specific performance. The court was held, by requiring 'notice in writing', Dr Hughes had specified that he had to actually receive the communication and had therefore excluded the postal rule. This rule also applies on the Saskatchewan River Bungalows Ltd. v. Maritime Life assurance Co . In this particular case, the contract term incurred wording such as "the acceptance must be received at the head office of X" acceptance have to delivery with such method and only was acceptable or encouraged. There is another case that defines the postal rule, which is Brinkibon Ltd. v. Stahag Stahi und Stahwarenhandelsgesellschaftt mbH . In the case, communication were conducted internationally, and using a variety of communication method. The court first held that the general rule “A contract is formed when acceptance is communicated by the offeree to the offeror. If it is necessary to determine where a contract is formed ... this should be at the place where acceptance is...
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