Research Paper

1386 Words May 9th, 2013 6 Pages
QUESTION PRESENTED: Should Postal rule be discarded?

In the paper we will discuss the postal rule and simultaneously take up the case laws related to the particular issue. First, we will introduce the postal rule. After that, we will point out the main features. At last we will critically analyse the rule and conclude. The whole paper is based on the English jurisdiction.

When the parties are located at a distance from each other and are contracting through postal communication it is difficult to decide when the contract is concluded. There are two possibilities in such a case:
1. The contract is concluded when the acceptance is posted.
2. The contract is concluded when the acceptance is received. A similar situation arose in
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One of the key features of the postal rule is that it applies only to acceptance. Other contractual letters such as revoking the offer do not take effect until the letter is delivered. This would imply that 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.

Another important feature of this rule is that it does not matter whether or not the offeror has received the letter of acceptance. An acceptance is complete once the letter of acceptance has been posted and thus the contract is formed then and there even if the offeror doesn’t receive the letter.

A similar situation arose in Household Fire & Accident Insurance Co v Grant. The defendant in this case had applied for allotment of 100 shares in the plaintiff company. A letter of allotment addressed to the defendant at his residence was posted in due time, but it never reached the defendant. Even then he was bound by the acceptance.

THESIGER LJ stated the rule thus: “An acceptance which only remains...if the post be treated as the agent of both the parties, then as soon as the letter of acceptance is delivered to the post office, the contract is made as complete and final and absolutely binding...How, then, can a casualty in the post office,

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