Postal Rule

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THE POSTAL ACCEPTANCE RULE
DANE GARBETT*

CONTENTS

I| Introduction| 1|
II| What Is The Postal Rule| 2|
III| Justification of the Postal Rule| 2|
IV| Application of the Postal Rule | 4|
V| Conclusion| 6|
VI| Bibliography| 7|

I Introduction

The decision of distance contracts has been one of the major issues that arise within contract law. In which questions had risen in regards to the application of the postal rule and whether it should continue. A strong debate has been frequent lately in regards to its relevance, especially in a time where postal systems aren’t as reliable as the once were, in which agreements are more likely to be discussed throughout electronic means. This paper will discuss two main arguments. The first one conversing justification of the postal acceptance rule, whilst the other analyses the application of the postal acceptance rule throughout electronic communications such as email or fax.

II What is the postal acceptance rule?

It is the rule (stated by the High Court in a case in 1957 which is still good law) that a contractual offer may be accepted by post and will be deemed accepted at the time the letter is sent – not when it is proven received – if it was contemplated that post was a means by which the offer might be accepted. In which a contractual offer is an agreement that contains promises between two or more parties with intentions of constructing certain legal rights and obligations, which is enforceable within a court of law. This can be a written or orally offered. The Postal Acceptance rule is a rule that has been embedded to decide upon the moment of contract formation by post. Which was found difficult to disclose when communicating acceptance or agreement terms by post, where a precise time of the acceptance was unsure. Due to the delay in the postal communication, the parties could not simultaneously be knowledgeable of an acceptance. This then raised a frequent amount of cases involving this type of arguments, which lead to the formation of the rule. Which was first seen within the court of Adams v Lindsell ([1818] 1 B &Ald, 681)

III Justification of The Rule

When the Postal acceptance rule was established with the Adams v Lindsell case. It was stated that “Where the circumstances are such that it must have been wihin 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”. A statement of the postal acceptance rule is found in Henthorn v Fraser [1892] discusses that, when the rule applies, acceptance takes place at the time the letter is posted, and not at the later time when the letter is received. Clearly the effect of the rule is that communication of acceptance is not required in cases where the rule applies. A universal validation for the postal acceptance rule has not been found to be accepted. It was suggested that the postal rule applies because the post office is the common ground for both the offered and the person to offer and therefore receives the acceptance letter as the middle man for the person who has offered. This explanation was rejected in Henthorn v Fraser. Others suggest the rule is explained by the argument that those who offer, in posting the letter has done all they can possibly do to communicate to the destination host as communication can only take place when the letter is received and that the letter is, after posting, beyond their control.

Some say the best explanation is that the common law has recognised that when letters are used one of the parties inevitably must accept the risk involved. If acceptance occurs when the letter is posted the risk is that the seller does something that amounts to a glitch in the contract although they are not aware of the contract coming into effect. For example a vendor sells goods that are the subject of...
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