Postal Rule in English Contract Law

Under English contract law, each contract requires an offer and acceptance of that offer. According to the case of Entores v. Miles Far East Corp. [1955] 2 QB 327, the acceptance must be communicated. However, the case of Adams v. Lindsell (1818) 1 B & Ald 681 introduced an exception to the general rule which required the acceptance to be communicated in order to be valid. Since the Adams case, if the post is the arranged (or proper) method to communicate acceptance, then the acceptance is deemed complete as soon as the letter of acceptance is posted. It should be noted that for a letter of acceptance to be valid it has to be posted, addressed and stamped properly.[1] The letter is regarded as posted only when it is in the possession of the post office.[2]

The postal rule revealed implications in its function. For instance, it does not apply to instantaneous forms of communications; such as telex, telephone or fax.[3] Moreover, under the postal rule if an offerree has posted his acceptance then he cannot revoke it by other means, such as telephone. Therefore, 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. In such case the offeror's revocation would be out of action. Finally, given that the acceptance is complete once the letter of acceptance is posted, it makes no difference whether the offeror actually receives the letter.[4] If a letter of acceptance were to be lost or delayed in the post, acceptance has still taken place.

 

In my opinion, two issues urgently arising for the above discussion concern the revocation and the time that the acceptance reaches the recipient (if it finally does). As regards to the former, it seems to me excessively restrictive not to be able to revoke the offer before the acceptance has reached the offerror. It is unfair, considering that under the general rule of contract, revocation of an offer can occur any time before the acceptance. Regarding the latter, I believe that having accepted an offer before the acceptance reaches the offerror must be very confusing in many cases.

Further reading:

Poole, J. (2008) Casebook on Contract Law (9^th edn) Oxford University Press, Oxford

Turner, C. (2005) Key Facts Contract Law (2nd edn) Hodder Arnold, Abingdon

Mckendrick, E. (2007) Contract Law (7^th edn) Palgrave Mcmillan

http://www.duhaime.org/LegalResources/Contracts/LawArticle-89/Part-4-Offer-Acceptance.aspx

http://en.wikipedia.org/wiki/Posting_rule#English_case_law

http://www.suite101.com/content/the-postal-rule-in-english-contract-law-a219512

http://www.lawofcontract.co.uk/formation/postal-rule.php

http://www.duhaime.org/LegalResources/Contracts/LawArticle-89/Part-4-Offer-Acceptance.aspx

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[1] Re London and Northern Bank (1900) 1 Ch 220; Getreideimport GmbH v Contimar (1953) 2 All ER 223, [1953] 1 WLR 793, [1953] 1 Lloyd's Rep 572.

[2] Re London & Northern Bank [1900] 1 Ch 220

[3] Entores Ltd v Miles Far East Corporation [1955] 2 QB 327

[4] Byrne v Van Tienhoven (1880) 5 CPD 344