In English law, the receipt rule governs communication of acceptance in contractual agreements, stating that acceptance becomes effective only when received and understood by the offeror.
Unlike the postal rule, the receipt rule applies to instantaneous communication methods, such as telephone, email, or telex, making acceptance valid at the moment it reaches the offeror.
The receipt rule requires careful consideration of timing and method of communication, ensuring clarity around contractual acceptance and avoiding disputes.
Understanding the receipt rule is crucial for managing expectations in commercial negotiations, ensuring parties clearly understand when contractual obligations arise.
You may find our more detailed guide on the receipt rule useful.
The defendants misdirected an offer to sell wool, delaying its receipt. The plaintiffs posted acceptance immediately on receiving it, but the defendants sold the wool elsewhere before it arrived. The court held the contract was formed when acceptance was posted, establishing the postal rule.
Time-charterers failed to pay hire punctually on 1st April 1970. The shipowners withdrew the vessel by telex notice. The key issue was whether withdrawal occurred before or after the late payment was received. The Court of Appeal held that the withdrawal notice preceded the payment and was therefore effective.
Brinkibon, a London company, sent acceptance of a contract by telex to Stahag in Vienna. The House of Lords held that for instantaneous communications like telex, a contract is formed where acceptance is received, thus the contract was formed in Austria, not England.
A 'battle of forms' dispute arose when sellers quoted a price with a price variation clause, but buyers placed an order on their own terms without such a clause. The sellers signed and returned the buyers' acknowledgement slip. The Court of Appeal held the contract was formed on the buyers' terms, establishing important principles for resolving conflicting standard form contracts.
Entores made an offer via Telex from London, which was accepted by Telex from Amsterdam. The Court of Appeal held that for instantaneous communications like Telex or telephone, a contract is complete when acceptance is received by the offeror, not when sent. The contract was therefore made in London where acceptance was received.
A dispute arose over a rare Ferrari 250 GTO gearbox separated from the car sold for $44 million. The buyer sought specific performance to obtain the gearbox. The Court of Appeal held that the buyer was entitled to the gearbox but must pay the seller $500,000 plus shipping costs, affirming contractual interpretation principles regarding agency and signature.
Mr Grant applied for shares in an insurance company. The company posted a letter of allotment which was lost in the post and never received. The Court of Appeal held that a valid contract existed because acceptance is effective upon posting, even if the letter never arrives. This case affirmed the postal rule.
Claimants alleged their solicitors were negligent in failing to advise that a share sale transaction had completed, thereby losing their right to enforce undertakings for payment. The court found completion did not occur as no confirmatory telephone call took place between solicitors, and dismissed the negligence claim.
October 4, 2026
National Case Law Archive
October 4, 2026
National Case Law Archive
October 4, 2026
National Case Law Archive