Acceptance of offer by post

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When an Offer is made with the intention of entering into a Contract, the acceptance must be communicated to the offerer, unless the acceptance is by conduct (see: Unilateral contract). Acceptance by post (rather than delivery by hand) is usually acceptable, but there are some legal complexities. In particular, at what point does the law deed the acceptance to have occurred? The standard rule is that acceptance occurs when the acceptance is posted. There are clearly some problems here.

  • What happens if the offer is lost in the post? Theoretically the offer is deemed to have been accepted, and the contract in place. Of course, if the either the offerer or the offerer wish to renege, either could claim that the offeree did not really post the acceptance, and it may be tricky to prove otherwise (e.g., Household Fire Insurance v Grant, see: Household Fire Insurance v Grant (1879)).
  • What happens if the offerer revokes the offer while it is in the post? Suppose that post is delayed, and the offerer wishes to offer to someone else; how long must he wait to know whether an acceptance has really occurred? (see: Byrne v van tienhoven (1880)). The acceptor may not be able to rely on the principle that 'posting constitutes acceptance' if a court deems that post was an unreasonable method of communication in the circumstances.
  • What happens if the offerer posts the acceptance, then changes his mind and sends a rejection of his acceptance by a faster post?

Because of these difficulties it is not unusual for the parties to 'contract out' of the 'posting constitutes acceptance' rule by, for example, including a clause in the contract to the effect that acceptance is effected on delivery instead.

Note that the 'posting constitutes acceptance' rule does not apply to 'instantaneous' methods of communication like telex; therefore it is not clear at present whether in confirmation of acceptance by e-mail or fax the acceptance is on sending or delivery.

In addition, the offer itself does not become valid until is is received by the offeree; posting does not constitute offer.

Contract Law