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Post Rules in Contract

In the modern world communication can take many forms: face to face conversations, telephone, letters, faxes, or e-mail. In some of therse there will be a delay between the sending of an acceptance and its coming to the attention of the offeror. The law of contract has to have rules, therefore, to make clear what is meant by 'communication is effective until it is received and understood by the person to whom it is addressed. This is in effect the rule that applies to offers, though as we shall see there are some cases which suggest that it may be possible to accept an offer of which you are unaware. These cases are of dubious authority , however, and can only possibly apply in very restricted circumstances. In any case they simply suggest that in some situations communication of an offer may not be necessary. Where communication of the offer is required, which is the case in virtually all situations, it is safe to say that communication means that the person to whom the offer is addressed is aware of it. Why should the position be any different as regards acceptances?

The problem first arose in relation to the post, where the delay is likely to be longest. Generally speaking, there will be a delay of at least 12 to 18 hours between the sending of an accceptance by post, and its receipt by the addressee. Does the sender of the acceptance have to wait until it is certain that the letter has arrived before being sure that a contract has been made? The issue was considered in Adams v Lindsell (1818).

The defendants sent a letter to the plaintiffs offering wool for sale, and asking for a reply 'in course of post'. The letter was misdirected by the defendants, and arrived later than would normally have been the case. The plaintiffs replied at once accepting, but the defendants, having decided that because of the delay the plaintiffs were not going to accept, had already sold the wool elsewhere. The plaintiffs sued for breach of contract. The court decided that to require a posted acceptance to arrive at its destination before it could be effective would be impractical, and inefficient. The acceptor would not be able to take any action on the contract until it had been confirmed that the acceptance had arrive. The court felt that this might result in each side waiting for confirmation of receipt of the last communication. This would not promote business efficacy. It would be much better if, as soon as the letter was posted, the acceptor could proceed on the basis that a contract had been made, and taken action accordingly.