Analysis Of The Postal Rule

Author:Ronan O'Brien
Pages:152-155
Cork Online Law R eview 2007 13
O’Brien, Analysis of the Postal Rule
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ANALYSIS OF THE POSTAL RULE
The Postal Rule Revisited
Ronan O’Brien
In The Law of Contract,1 Treitel refers to the postal rule as being an
arbitrary (based on random choice or personal whim)2 rule. As there are
differing views on where acceptance by post should be deemed complete,
serious problems can arise for the parties to the contract when a breakdown of
postal communication occurs. Three possible solutions to this problem exist.
The acceptance is complete either when the letter of acceptance is placed in
the letterbox; when it is delivered to the offeror’s address; or when the letter of
acceptance is brought to the attention of the offeror.3 In Adams v. Lindsell4 a
solution was laid down. It was held was that the contract had been accepted
when the letter was placed in the letterbox. This is taken to be the understood
postal rule. More modern forms of communication such as e–mail, telephones
with answering machines and faxes do not follow this rule.
The ruling in Adams v. Lindsell is often seen as one of convenience.5
Without a definite ruling on postal agreement, no contract could be completed
by post, as “[t]he [offerees] ought not to be bound till after they had received
the notification that the [offerors] had received their answer … and so it might
go on ad infinitum.”6 Although the two latter possible solutions would seem
more representative of the idea that acceptance must be communicated, the
court favoured the application of the first solution. In context of the times,
reasons for this can be established. At the time, office ledgers usually had a
record of sent letters, including the date of issue. This meant that it was easier
to verify that a letter had been sent, than to verify its receipt or its being
brought to the attention of the addressee. It is also noted that in 1818, there
was no rule that acceptance must be communicated.7
One of the major sources of criticism of the rule is that it favours the
offeree. German law holds that the contract is completed on arrival at the
offeror’s address, even though this system may be harder to prove, it follows
the doctrine of communication of acceptance more stringently. The English
case of Household Fire Insurance v. Grant8 is a prime example of the possible
injustice which may result in the application of the postal rule. In this case, on
receipt of an offer from Grant to take up an insurance policy, the company
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1 Treitel G.H., The Law of Contract, 10th ed., (Thoms on sweet and Maxwell, 1999.)
2 Online Compact O xford English Dictionary
http://www.askox ford.com/concise_ oed/arbitrary?vie w=uk> (date acce ssed: 25 November
2006)
3 M. P. Furmston. C heshire, Fifoot & Furmston’s Law of Contract (14th ed., Butterwort hs Ltd,
Dublin, 2001) p. 5 7
4 (1818) 1 B. & Ald. 681.
5 Robert Clark, Con tract Law in Ireland (5th ed., Tho mson Round Hall, 2004) p. 21
6 supra at n. 3
7 M. P. Furmston. Chesh ire, Fifoot & Furmston’s Law of C ontract (14th ed., Butterworths L td,
Dublin, 2001) p. 5 8.
8 (1879) L.R. 4 Ex. 216.

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