Postal Rule

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  • Topic: Option contract, Contract, Offer and acceptance
  • Pages : 1 (427 words )
  • Download(s) : 97
  • Published : January 30, 2013
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The rule was established by a series of 19th century cases.
Only for acceptance does one has to abide by this rule. In case of contractual letters it takes affect only after the delivery of the letter. This is because it is probable that a letter of acceptance is poster after a letter of revocation of the offer has been posted but before its delivery and in such a case acceptance will be completed when the letter of acceptance was posted, the offeror’s revocation being non-existent. As per this rule, performance as well as defective performance is acceptance. For example, if A orders 1000 blue coathangers, and B mistakenly ships 1000 red coathangers, this is still an acceptance of the contract. However, if B ships the red coathangers with a note that they sent these because they had run out of blue coathangers, this is not an acceptance, but rather an accommodation, which is a form of counter-offer. One of the repercussions of this rule is that it makes no difference whether the offeror actually receives the letter or not. Acceptance takes place even if the letter of acceptance was lost. The only exception being if the offeree knows or has reason to know that the letter never reached the offeror. Also, this rule does not apply to instant forms of communication such as telephone or fax. But if the offeree accepts by “commercially unreasonable means” (pony express) then acceptance will not be complete until it has been actually received. A letter will be considered as “posted” only when it is in the possession of the post office, and not while it is in the process of delivery. The posting rule does not apply to option contracts or irrevocable offers where acceptance is still effective only upon receipt. This is because the offeree no longer needs protection against subsequently mailed revocations of the offer. “Where parties are at distance from one another, and an offer is sent by mail, it is universally held in this country [United States] that the reply...
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