Consequences
Lindley J held that the withdrawal of the offer was not effective until it was communicated. His judgment stated the following:
There is no doubt an offer can be withdrawn before it is accepted, and it is immaterial whether the offer is expressed to be open for acceptance for a given time or not. The offer was posted on the 1st of October, the withdrawal was posted on the 8th, and did not reach the plaintiff until after he had posted his letter of the 11th accepting the offer. It may be taken as now settled that where an offer is made and accepted by letters sent through the post, the contract is completed the moment the letter accepting the offer is posted: Harris's Case ; Dunlop v Higgins , even although it never reaches its destination. When, however, those authorities are looked at, it will be seen that they are based upon the principle that the writer of the offer has expressly or impliedly assented to treat an answer to him by a letter duly posted as a sufficient acceptance and notification to himself, or, in other words, he has made the post office his agent to receive the acceptance and notification of it. But this principle appears to me to be inapplicable to the case of the withdrawal of an offer. In this particular case I find no authority in fact given by the plaintiffs to the defendants to notify a withdrawal of their offer by merely posting a letter, and there is no legal principle or decision which compels me to hold, contrary to the fact, that the letter of the 8th of October is to be treated as communicated to the plaintiff on that day or on any day before the 20th, when the letter reached him... ...Before leaving this part of the case it may be as well to point out the extreme injustice and inconvenience which any other conclusion would produce. If the defendants’ contention were to prevail no person who had received an offer by post and had accepted it would know his position until he had waited such a time as to be quite sure that a letter withdrawing the offer had not been posted before his acceptance of it. [3]
Lindley's judgment notes in part that the postal rule cases which he reviewed include an express or implied consent by an offeror to treat an answer duly sent by post as an acceptance.
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 is an English contract law decision by the Court of Appeal, which held an advertisement containing certain terms to get a reward constituted a binding unilateral offer that could be accepted by anyone who performed its terms. It is notable for its treatment of contract and of puffery in advertising, for its curious subject matter associated with medical quackery, and how the influential judges developed the law in inventive ways. Carlill is frequently discussed as an introductory contract case, and may often be the first legal case a law student studies in the law of contract.
The posting rule is an exception to the general rule of contract law in common law countries that acceptance of an offer takes place when communicated. Under the posting rule, that acceptance takes effect when a letter is posted ; the post office will be the universal service provider, such as the UK's Royal Mail, the Australia Post, or the United States Postal Service. In plain English, the "meeting of the minds" necessary to contract formation occurs at the exact moment word of acceptance is sent via post by the person accepting it, rather than when that acceptance is received by the person who offered the contract.
Offer and acceptance are generally recognised as essential requirements for the formation of a contract, and analysis of their operation is a traditional approach in contract law. The offer and acceptance formula, developed in the 19th century, identifies a moment of formation when the parties are of one mind. This classical approach to contract formation has been modified by developments in the law of estoppel, misleading conduct, misrepresentation, unjust enrichment, and power of acceptance.
Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3 is a landmark English Court of Appeal decision in contract law on the moment of acceptance of a contract over telex. Denning LJ found that the regular postal rule did not apply for instantaneous means of communications such as a telex. Instead, acceptance occurs when and where the message of acceptance is received.
Revocation is the act of recall or annulment. It is the cancelling of an act, the recalling of a grant or privilege, or the making void of some deed previously existing. A temporary revocation of a grant or privilege is called a suspension.
Adams v Lindsell(1818) 1 B & Ald 681, is an English contract case regarded as the first case towards the establishment of the "postal rule" for acceptance of an offer. Ordinarily, any form of acceptance must be communicated expressly to an offeror; however, it was found that where a letter of acceptance is posted, an offer is accepted "in course of post".
Henthorn v Fraser [1892] 2 Ch 27 is a decision of the Court of Appeal of England and Wales dealing with the postal rule in English law of contract formation.
Dunlop v Higgins [(1848) 1 H.L.C. 381] was an early decision confirming the postal rule in the Scots law of contract formation. The decision was based on the earlier case of Adams v. Lindsell.
In English contract law, an agreement establishes the first stage in the existence of a contract. The three main elements of contractual formation are whether there is (1) offer and acceptance (agreement) (2) consideration (3) an intention to be legally bound.
In re Imperial Land Company of Marseilles, ex parte Harris (1872) Law Rep. 7 Ch. App. 587, also known as Harris's case, is an English contract law case. It reconfirmed the postal rule of Adams v Lindsell (1818).
Stevenson, Jaques, & Co v McLean [1880] 5 QBD 346 is an English contract law case concerning the rules on communication of acceptance by telegraph. Its approach contrasts to the postal rule.
Daulia Ltd v Four Millbank Nominees Ltd [1977] is an English contract law case, concerning unilateral contracts, and when embarking on the performance of an act for which an offer is open, at what point the offer may be withdrawn. In particular, Goff LJ observed that there would be a duty to not prevent full performance of terms in a unilateral offer, once performance had begun.
The Indian Contract Act, 1872 prescribes the law relating to contracts in India and is the key act regulating Indian contract law. The Act is based on the principles of English Common Law. It is applicable to all the states of India. It determines the circumstances in which promises made by the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act defines a contract as an agreement which is enforceable by law.
The Household Fire and Carriage Accident Insurance Company (Limited) v Grant (1878–79) LR 4 Ex D 216 is an English contract law case, which concerns the "postal rule". It contains an important dissenting judgment by Bramwell LJ, who wished to dispose of it.
Tenax Steamship Co v Owners of the Motor Vessel Brimnes [1974] EWCA Civ 15 is an English contract law case on agreement. It decided that communication of withdrawal of an offer by telex is effective when it could be read, rather than when it is in fact read.
Holwell Securities Ltd v Hughes [1974] 1 WLR 155 is an English contract law case overriding the usual postal rule. Ordinarily, a contractual offer can be deemed to be accepted when it leaves the offeree and enters the postal system.
Dickinson v Dodds (1876) 2 Ch D 463 is an English contract law case, heard by the Court of Appeal, Chancery Division, which held that notification by a third party of an offer's withdrawal is effective just like a withdrawal by the person who made an offer. The significance of this case to many students of contract law is that a promise to keep an offer open is itself a contract which must have some consideration.
Power of acceptance is a concept of contract law. It refers to the power vested in the offeree by the offeror through the offer being made. It is used to determine whether the acceptance of an offer is valid.
Douglas v. U.S. Dist. Court ex rel Talk America, 495 F.3d 1062 (2007), is a U.S. Circuit Court of Appeals case that examines whether a service provider may change the terms of its service contract by merely posting a revised contract on its website, without informing the other party of the changes.
Ellefson v. Megadeth, Inc. 2005 WL 82022 was a contracts case tried in the United States District Court for the Southern District of New York in 2005, in which the court determine to enforce a settlement agreement page signed and sent by fax, as an acceptance of a contract or as a counter offer.
