Postal Rule

Topics: Contract, Offer and acceptance, Communication Pages: 9 (2612 words) Published: June 7, 2012
Should the Postal Acceptance Rule extend to Modern Types of Communications such as E-mail? Joy B. Ganado


Today, changes in the way commerce is undertaken relies very much on technology. From Internet sites advertising etc., to making agreements via email, technology forms the development of modern business operations. The stage at which technology advances is very challenging on today’s law and introduces much difficulty in the construction of an adequate framework for e-commerce.

Although the postal rule is constituted within the legal system, the range of its pertinence nowadays to communication is a matter, which are inconclusively ascertained by the courts. From the start of the postal rule, communications via technologies has dramatically developed. And as this new methods of communication emerged, the courts have been compelled to determine the applicability of the postal acceptance rule.

For this essay, the author wishes to discuss about what is postal rule, its issues, how it is presently applied and comparing and contrasting the postal rule against the rules that are accepted for the determination of time of acceptance sent through fax or electronic mail. While many argues that the application of postal acceptance rule should be extended to modern types of communication technologies,I believe that such should be stick to it’s old coverage and should not be bound to present day types of communications like emails etc.

II.Postal Acceptance Rule.

In contract formation, there must be an offer and a corresponding acceptance. Below are the rules for an offer acceptance:

1.Must be clear and unambiguous-having only one meaning or interpretation and leading to only one conclusion. 2.Offeror requirement must be met-the demands of the offeror must be satisfied. 3.Must accept in reliance upon offer.

4.Acceptance must be communicated.

The fourth one above is the general principle governing the rule of acceptance in Australian setting where it states that acceptance of an offer is ineffective unless it was made known to the offeror. But an exception to this rule is the postal acceptance rule.

Postal Rule allows acceptance to remain effective even if it is not communicated to the offeror when the acceptance is sent through the post and such means (postal) was agreed by both parties. In other words, an acceptance of offer by mail is complete as soon as the letter is put into the mail box rather that upon receipt of the intended recipient.

II.a Evolution of the postal acceptance rule

The history of the postal acceptance rule can be tracked back on the early 19th century on an English contract case of Adams v Lindsell. The case involved two parties in the sale of wool. On 2 September, the defendants wrote to the plaintiffs offering to sell them certain fleeces of wool and requiring an answer in the course of post. The defendant misdirected the letter so that the plaintiffs did not receive it until 5 September. The plaintiffs posted their acceptance on the same day but it was not received until 9 September. Meanwhile, on 8 September, the defendants, not having received an answer by 7 September as they had expected, sold the wool to someone else.

The defendants argued that there could not be a binding contract until the answer was actually received, and until then they were free to sell the wool to another buyer.
Whatever the reasons for the emergence of the principle in the first place, it can be justified on the basis that if both parties contemplate that the post may be used, on posting the letter the offeree has done all that he can be reasonably expected to do to bring the acceptance to the offeror’s attention. Once he puts the...

Bibliography: Adams v Lindsell (1818) 1 B & Ald
Byrne & Co v Leon Van Tienhoven and Co (1880) 5 CPD
Christensen, Sharon --- " [2001] QUTLawJJl
Entores Limited v Miles Far East Corporation (1955) 2 QB

Hen thorn v Fraser (1892) 2 Ch
J.Fitzpatrick, C. Symes, A. Veljanaski and D. Parker, Business and Corporation Law.1st Edition, 2011,Butterworths, Australia
(1818) B and Ald 681;Tooth v Fleming (1859) Legge
(1879) 4 ExD
(1892) 2 Ch
[ 1 ]. Byrne & Co v Leon Van Tienhoven and Co (1880) 5 CPD 344
[ 2 ]
[ 3 ]. (1818) B and Ald 681;The rule was first applied in Australia in the case of Tooth v Fleming (1859) Legge 1152
[ 4 ]
[ 5 ]. For example: Entores Limited v Miles Far East Corporation (1955) 2 QB 327
[ 6 ]
[ 8 ]. Adams v Lindsell (1818) 1 B & Ald 681 at 683
[ 9 ]
[ 10 ]. (1879) 4 ExD 216
[ 11 ]
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