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8 Cards in this Set
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Adams v Lindsell 1818 (Contract is formed when acceptance letter is posted, not received. This case began the rule.) |
Offer sale of wool. Seller asked for acceptance by post. Purchaser replied on same day in letter. However, letter of acceptance was not received until long after, by then wool was sold to someone else. It was held that the letter of acceptance was valid on time of posting. Court developed rule to prevent possible injustices by delays in postal system in the early days. |
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Henthorn v Fraser 1892 (A contract is formed even though the actual notification of acceptance is received at a later point than revocation of the original offer has been made) |
Fraser made offers to sell house to Henthorn. The day after it was made, he posted another letter, revoking the original offer. When Henthorn received the offers he posted a letter of acceptance at 3.50pm. He received the rejection letter at 5pm same day. Contract was formed as he posted letter of acceptance earlier than receiving letter of revocation of offer. |
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Household Fire Insurance v Grant 1879 (Rule applies despite never receiving acceptance letter) |
Grant made written offer to buy shares. Insurance company posted a letter of allotment (acceptance) to Grant. Letter was lost in post. When company went liquidation Grant was liable. Court found he became a shareholder despite NEVER RECEIVING THE LETTER OF ACCEPTANCE. |
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Holwell Securities v Hughes 1974 (Avoiding the postal rule by stating a different form of acceptance) |
Hughes sent an option for buying land. The option was exercisable by notice in writing. The firm posted its acceptance but it never reached Hughes. The firm tried to make use of postal rule but the courts found that the fact that actual communication of acceptance was required meant that the postal rule could not apply. |
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Buckley J in Manchester Diocesan Council for Education v Commercial and General Investments Ltd1969 (Excerpt to state avoiding postal rule by stating other method) |
'an offeror, who by the terms of his offer insists on acceptance in a particular way is entitled to insist that he is not bound unless acceptance is effected or communicated in the precise way'. |
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Lord Denning on communication by either telex or telephone |
'Suppose, for instance, that I shout an offer to a man across a river or a courtyard but I do not hear his reply because it is drowned by an aircraft flying overhead. There is no contract at this moment. If he wishes to make a contract we must wait till the aircraft is gone and then shout back his acceptance so that I can hear what he says. Not till I have the answer am I bound. |
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Brinkibon Ltd v Stahag Stahl 1983 (Acceptance through telex received is immediately effective UNLESS it is received outside office hours. It will only be effective when the office has re-opened) |
Telex received outside office hours. HL held that the acceptance could only be effective and the contract formed after office was re-opened. |
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Lord Wilberforce on the difficulties inherent in modern methods of communication |
'No universal rule can over all such cases; they must be resolved by reference to the intention of the parties, by sound business practice and in some cases by a judgement where the risk should lie'. |
