Postal Rule In English Contract Law

Law of contract is based on the intention of both the parties to create legal relations between themselves. The fundamental principle is that intention to be shared; it must be communicated from one party to the other. The individual who sends the correspondence takes the risk of its not arriving. However the common law has long accepted a significant exception to this rule. This exception is known as ‘postal rule’.

The postal rule are fundamental rules of offer and acceptance in English contract law. It determines that effective communication of acceptance by letter is on posting whereas effective communication of revocation by letter is on delivery. This rule applies where post is the agreed form of communication.

One of the biggest concerns

To begin with, it figures out if a contract was made at all, in the absence of a received acceptance. Next, it decides when the agreement was made, namely at the time the acceptance is posted. This is important in many cases, for instance in meeting due dates, in choosing among contending acceptances, in choosing whether an old or another expense rate ought to apply to a deal, etc. At last, it fixed time beyond which the offer couldn't be revoked. The postal rule has several more benefits - one of which is that the individual accepting the contract will be able to reap the immediate benefits of acceptance, even if there are unexpected delays in the contract’s delivery. Additionally, the rule allows for last-minute acceptance of contracts. For example, when filing United States income tax returns, the date of the postmark, not the date of receipt by the Internal Revenue Service, counts as the filing dates. In other words, the postal acceptance rule can extend the time an individual has to respond. Also this postal rule tends to prevent fraud. Since letter of acceptance will almost always arrive. So their will be very less opportunity for fraud on part of offeree. Whereas in case where contract is complete on receiving the acceptance, it would be easy for offeror to deny that he had not received the acceptance. It has now and again been argued that the rule assumes that the postal system is the

It is relatively easy for the parties to reject postal rule. In postal rule, the offeror actually has the choice whether he want to be bound with the rule or not. This is demonstrated when the offeror can explicitly state in their offer that no agreement will be made unless they do get the letter of acceptance. Such a circumstance emerged in the case Holwell securities Ltd v Hughes [1974] 1 WLR 155, where the in the terms of the offer it was plainly demonstrated that acceptance must be by "notice in writing". The letter of acceptance was lost in the post; in this manner Hughes did not get a valid acceptance as he had not gotten a "notice in writing". Overall if not expressed clearly, the offeror is understood and expected to be bound with the rule and all its consequences in postal rule. This point made a decent premise for the court not to change the law in postal rule as offeror is legally recognized and assumed to have a general idea about this