Postal Rule

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The rule was established by Anthony in the 19th century cases, starting with Adams v Lindsell (1818) B & Ald 681, which was later confirmed in Dunlop v Higgins (1848) 1 HL Cas 381, Household Fire Insurance Company v Grant (1879) 4 Ex D 216 and Henthorn v Fraser [1892] 2 Ch 27.

The posting rule applies only to acceptance. Other contractual letters (such as one revoking the offer) do not take effect until the letter is delivered, as in Stevenson, Jacques & Co v McLean (1880) 5 QBD 346. The implication of this is that it is possible for a letter of acceptance to be posted after a letter of revocation of the offer has been posted but before it is delivered, and acceptance will be complete at the time that the letter of acceptance was posted—the offeror's revocation would be inoperative.

Example 1:

Day 1: A makes an offer to B.
Day 2: A decides to revoke the offer and puts a letter in the mail to B revoking the offer. Day 3: B puts a letter accepting the offer in the mail.
Day 4: B receives A's revocation letter.

The letter of revocation can be effective only when received, that is Day 4. However, a contract was formed on Day 3 when the letter of acceptance was posted. It is too late for A to revoke the offer.

Example 2:

Day 1: A makes an offer to B.
Day 2: B intends to reject the offer by putting a letter in the mail to A rejecting the offer. Day 3: B changes his mind and sends a fax to A accepting the offer.

In this situation, whichever communication A receives first will govern.

Example 3:

Day 1: A makes an offer to sell a parcel of land to B.
Day 2: B mails her acceptance.
Day 3: Before A receives B's acceptance, B telephones A and states she wishes to reject the offer. Day 4: B's original letter of acceptance arrives, A then records the contract as a sale.

B's acceptance of the offer means there is a binding contract -- she is obliged to pay for...
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