Lecture notes
Postal Rule
- Module
- Law (M100)
- Institution
- The University Of Liverpool (UoL)
this lecture explains how the postal rule is a method of acceptance in contract law
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Agreement: Acceptance (Postal Rule)Leading Case: Adams v Lindsell (1818)
On the 2nd September 1817 the defendants wrote to the plaintiff offering to sell them a
quantity of ‘good, fair quality country wool’. Even though the letter was posted on the 2nd
September, the plaintiffs had only received it on the 5th September and this was because the
defendants had misaddressed their offer. Once the plaintiffs received this offer, they sent it
back with their acceptance that evening, however the acceptance was received by the
defendants until the 9th September. Unfortunately, on the 8th September, the defendants had
already sold the wool to a third party.
The court held in this case that the acceptance of the 5th September was effective from the
time of proper posting. Consequently, there was a binding contract between the two parties.
Acceptance by Post
• The case therefore shows to us that an agreement has taken place once the letter of
acceptance has been properly posted.
• However, the postal rule only applies to acceptances and not any other form of
communication (offers).
•
Household Fire and Carriage Accident Insurance Co v Grant (1879)
In this case, we see that the postal rule still applies when acceptance gets delayed or lost in
the post.
The two parties applied for shares in the plaintiffs company and the company sent a letter if
allotment by the way of post. This is seen as an acceptance of the offer, but this never reached
Grant. Subsequently, the company went into liquidation and the liquidator on behalf of the
company sued for the balance outstanding on the shares. However, Grant argued that he isn’t
required to pay this as he didn’t receive a reply to his offer to buy the shares.
However, the court held that a contract was made at the moment the letter of allotment
(acceptance) was posted.
Acceptance by Post RULES
⁃ Henthorn v Fraser (1892)
In this case it was 7th July 1891, the plaintiff lived in Birkenhead and attended an office of the
land society in Liverpool in order to negotiate house purchases. The Secretary of the society
signed a note which constituted an option to buy properties. The following day the secretary
posted a revocation of the option between 12-1pm which then reached Birkenhead at 5pm that
same day. However at 3:50pm the plaintiff had already posted an acceptance which was
delivered that evening and received at the offices of the land society when they opened that
following morning.
Lord Hershall then decided in the courts that ‘whether circumstances are such that it must
have been within the contemplation of the parties but according to ordinary usages of
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