Application of Postal Rule in Business & Contract Legal Studies

Business & Contract Legal Studies
BUSINESS & CONTRACT LEGAL STUDIES
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The City and State
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Business & Contract Legal Studies 1
This case involves Peter and John. Peter was directed by John to conclude the contract for
a sale of wine by sending John a written order together with a cheque to John for the purchase.
However, John did not wait for Peter’s response before concluding a contract with another
customer. Both parties dispute the existence of a contract.
Issue
The main issue for Peter and John case is the application of the postal rule in situations
where an offer is accepted by posting the acceptance while the offeror contracts with someone
else since he was not aware of the acceptance.
Rule
The rules of acceptance of an offer require communication of the offeree to the offeror
(Miller and Hollowell, 2010, p.123). However, the postal rule provides an exception to this
“general rule. According to (Macdonald, 2013), the basic rules that apply under English law in
regarding acceptance by post states that acceptance becomes valid the moment the offeree posts
his acceptance as opposed to when the offeror receives or opens it. These rules were first made in
ruling of (Adams v. Lindsell, [1818]). These principles grant the offeree the right to enforce the
contract even in situations where letters are delayed or lost provided that it was not the offeree’s
faults (O’Sullivan and Hilliard, 2016, p.31). The principles exonerate the offerees from any
liability that may arise after they have posted their acceptance. On the part of the offeror, the law
requires them to wait for a reasonable time moving on to contract with other people.
Application
When it comes to acceptance of an offer, the law allows the offeree to use the postal
services provided that the rules set by the offeror do not displace this method of acceptance.

Business & Contract Legal Studies 2
Other times these rules apply are when the offeror expressly instructs the offeree to post their
acceptance as found in the case between Peter and John. In (Adams v. Lindsell, [1818]), the
defendant was offering to sell wool. He asked the claimant to communicate his acceptance
through the poster. However, there were some delays in the postal services, and hence the
defendants decided to trade with another customer. The defendant believed that the claimant was
in no way going to be interested in the deal. The claimant brought suit requesting to enforce the
contract. On hearing the case, the court found that the claimant had sent the letter the same day
he was given the offer. The court reasoned that the contract was enforceable.
On analysis, the court found that it could not deny the claimant the right to enforce the
contract since acceptance was sent the same day the offeror communicated the offer. It was the
responsibility of the offeror to give the post office sometime to deliver the letter. Another
justification for this reasoning was that it could have been inherently unfair to allow Lindsell
dishonor the contract in which he had misaddressed his offer (Stevenson, 2010). As can be seen,
the facts in John and Peter situation matches this scenario. John was the one who started the
negotiation and provided the instructions for lodging an order which was possible through the
poster. Peter was in full compliance with John’s rules. Again, a difference of one day could not
be counted as a huge difference. Sending acceptance the following day was within the reasonable
business time.
Another rationale provided by the court is that the ruling was necessary for business
efficacy. The court reasoned that if the claimant had not sent the acceptance through the post, the
contract would have remained ad infinitum with each side waiting for the confirmation (Stone
and Devenney, 2015, p.63). If the same concept is weighed in Peter’s case, it is worth concluding