The Valid Contract

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  • Topic: Contract, Offer and acceptance, Meeting of the minds
  • Pages : 6 (2101 words )
  • Download(s) : 932
  • Published : October 5, 2008
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A valid contract consists of all essential components which present and the court will enforce as a legally binding promise . One of the elements contract to create a contract is agreement which included an offer and acceptance. “Acceptance is a final and unqualified assent to the terms of the offer, made in the manner specified or indicated by the offeror” . Acceptance may be express orally, in writing, occasionally, or even by implied from the offeree’s conduct. In communication of acceptance, general rule claimed that acceptance ordinarily occurs at the time when, and the place where the offeror receives the acceptance .As a general rule, “what must be accepted is what was offered” , it exclusive of addition, deletion, or qualification. However, there is one major exception to the rule that acceptance must be communicated that is postal rule.

Postal rule is a well-known legal principle in contract law. The postal rule of acceptance of an offer became entrenched in the common law of contact in the English courts and therefore in the Australia courts during the nineteenth century. Moreover, it continues to apply today even that more efficient methods of communication have since emerged. Postal rule states that “postal service is an acceptable method of communication between offeror and offeree, if a letter of acceptance takes effect immediately upon posting, rather than upon receipt , and acceptance is therefore taken to have been communicated at the time of posting the letter” . As an academic problem, three possible solutions that offer made through the post might be regarded as acceptance in complete either, when the letter of acceptance put into the post; when it is delivered to the offeror’s address; or when the letter of acceptance is brought to the actual notice of the offeror. Therefore, the disadvantage is that acceptance is formed before offeror know about the acceptance. Indeed, the postal rule is unfair to the offeror, because offeror does not know that had bounded to a contract with acknowledgement.

The postal rule was first established in Adams v. Linsell when the court decided the moment of contract development by post. In this case, court held that the defendants were liable in the consideration of both parties that the post would be used as the means communicating acceptance . The actual facts were that the offer, which was limited to “acceptance by return post”, was misdirected and reached the offeree late. The offeree replied immediately, but by the time acceptance had reached the offeror, unfortunately that had sold the goods to third parties. Therefore, the court held that the contract was complete at the moment the offeree mailed the acceptance. The court also found that parties when communicating acceptance by post were not sure at the accurate time the acceptance had been communicated. As postal communication is subject to delay, the parties were not simultaneously aware of the communication. This created a number of problems and led to a formulation of the rule. The views expressed in Adams v. Linsell have been accepted and applied consistently ever since and have even extended to include acceptance by telegram. The exclusive limitation, as stated by Lord Herschell in Henthorn v. Fraser is: “the circumstances [must be] 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” . In such case the courts presume that acceptance by post was considered unless the offeror, either expressly or by implication, indicted that actual receipt was required. Offeror can stipulate the required method of acceptance. Offeror prescribe specifies actual communication as the means of acceptance. In other words, the offeror can say to offeree: “I must receive your acceptance for it to be effective”. Such a statement can...
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