Postal rule CASES
In English law, the postal rule is an exception to the general requirement for acceptance of contracts to be communicated, stating that acceptance is effective upon posting, rather than when received by the offeror.
Definition and Principles
The postal rule applies when acceptance by mail is considered appropriate. Once acceptance is correctly posted, a binding contract is immediately formed, regardless of delays or failure in delivery.
Key Conditions
- Proper Posting: Acceptance must be correctly addressed, stamped, and posted.
- Reasonable Method: Postal acceptance must be an agreed or reasonable mode of communication.
- Exclusion: Parties may explicitly exclude the postal rule in their contract.
Practical Implications
The rule provides certainty and protection for offerees, enabling reliance upon acceptance once dispatched. Offerors must clearly specify acceptance methods if postal rule application is undesired.
Limitations
The postal rule does not apply to instantaneous forms of communication such as email, fax, or telephone.
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The claimant was granted an option to purchase property, exercisable by 'notice in writing'. They posted the acceptance, but it never arrived. The court held that the requirement for 'notice' meant actual communication, thus ousting the postal acceptance rule. Facts On 19th October 1971, the defendant, Dr. Hughes, granted the plaintiffs, Holwell Securities Ltd, an option to purchase his property for £45,000. The agreement contained a specific clause for exercising the option: ‘The said option shall be exercisable by notice in writing to the Intending Vendor [Dr. Hughes] at any time within six months from the date hereof’. On 14th
An offer to sell property was made in person. The buyer, who lived in another town, accepted by post. Before the acceptance arrived, the seller posted a revocation. The court held a binding contract was formed when the acceptance was posted. Facts On 7 July 1891, the defendants gave the claimant, Mr Henthorn, a note offering him the option to purchase certain houses for £750, with the offer to remain open for fourteen days. The claimant resided in Birkenhead, while the offer was made at the defendants’ office in Liverpool. The next day, 8 July, the defendants posted a letter
An English company sent an offer by telex to Holland; the acceptance was telexed back to London. The court held that for instantaneous communications, a contract is formed where and when acceptance is received, establishing London as the place of contract. Facts The plaintiffs, Entores Ltd., were an English company based in London. The defendants, Miles Far East Corporation, were an American corporation with agents in Amsterdam, Holland. The plaintiffs in London made an offer by Telex to the defendants’ agents in Amsterdam for the purchase of a quantity of copper cathodes. The defendants’ agents in Amsterdam sent a Telex
Defendants offered to sell goods by post, then posted a letter revoking the offer. Before receiving the revocation, the claimants accepted by telegram. The court held the revocation was only effective upon receipt, by which time a binding contract had formed. Facts The defendants, Leon Van Tienhoven & Co., were based in Cardiff. On 1 October, they posted a letter to the plaintiffs, Byrne & Co. in New York, offering to sell 1000 boxes of tinplates. On 8 October, the defendants posted a second letter revoking their offer. On 11 October, the plaintiffs received the initial offer letter and immediately
Facts The defendants, wool-dealers in St. Ives, sent a letter to the plaintiffs, who were woollen manufacturers in Bromsgrove, on 2 September 1817, offering to sell them a quantity of wool. The defendants required an answer ‘in course of post’. Critically, the defendants misdirected this letter to ‘Bromsgrove, Leicestershire’, instead of the correct address in Worcestershire. Consequently, the letter did not reach the plaintiffs until the evening of 5 September. Upon receipt, the plaintiffs immediately wrote a letter of acceptance, which they posted the same evening. This acceptance letter was delivered to the defendants on 9 September. However, not having
