Business Law Case Study: Contract Law and Postal Rule Analysis

This case study delves into a business law scenario concerning a travel arrangement gone awry. Isabella, who loves collecting memorabilia, planned a trip through her sister Siena's travel agency, UberTour Pty Ltd. Siena sent an email detailing the tour, charges, and a timeframe for Isabella's response. Isabella replied promptly, but due to Siena's negligence in not paying the email service bill, Siena didn't receive the reply within the stipulated time, leading to the trip's cancellation. The assignment examines the application of the postal rule in contract law, where acceptance is deemed effective upon communication, even if the message is delayed or not received due to circumstances beyond the sender's control. Key legal principles such as offer and acceptance, consideration, capacity, intention, and certainty in contract formation are analyzed, referencing landmark cases like Adam v Lindsell, Tallerman & Co Pty Ltd v Nathan's Merchandise, and Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH. The conclusion asserts that Siena breached the contract, entitling Isabella to claim damages.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Issue.................................................................................................................................................2
Rules................................................................................................................................................2
Application......................................................................................................................................3
Conclusion.......................................................................................................................................4
Reference.........................................................................................................................................5

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Issue
According to the case study Tata showroom husband arises whether Isabella can take any
legal action against her sister for not providing the appropriate service according to their contract
and able to claim the compensation for the reach of the contract?
Rules
The postal rule is one of the important terms under the contract law. According o the
terms of the contract the postal rule also consist of equal terms which includes the offer and
acceptance, consideration, capacity, intention and certainty which must formed between two or
more than two parties. The basic medium of the postal rule is the contract should form through
email or phone or letter. It must have a legal intention to create a valid contract under the specific
mutual terms.
Adam v Lindsell [1818] is one of the historical cases of postal rule under the contract
law where the terms of the contract has been applied for the first time by the federal government.
The court has identified the issues where they found the facts that a contract has been introduced
between two parties through a mail. The both of the parties has been found to follow all the
elements of contract which consists of the offer and acceptance, consideration, capacity,
intention and certainty. However later the plaintiff has filled a case against the defendant for
breach the terms of the contract and applies for the compensation for the loss he has suffered.
Tallerman & Co Pty Ltd v Nathan's Merchandise (1957) is another famous case
where the fact has been found that a contract has been formed according to the terms of postal

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rule. However, the court has added the statement where it has found that the contract has failed
to satisfy the terms of contract for not accept the offer.
In the case of Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH
House of Lords [1983] the contract has failed to satisfy the terms of postal rules and it breached
the contract by the defendant.
Bressan v Squires Supreme Court of New South Wales [1974] is another case which
significance the terms of the postal rule under the contract law where contract has been placed
through an email between the parties but it again failed satisfies the terms.
The Entores Ltd v Miles Far East Corpn (1955) and Holwell securities Ltd v Hughes
(1974) other two case of postal rules where the contract has been formed according to the terms
of postal rule which includes the offer and acceptance, consideration, capacity, intention and
certainty.
Application
According to the fact of case Isabella loves to collect film and television memorabilia and
she planned for a holiday in United Kingdom, Italy, London and Rome. Therefore she contact
with UberTour Pty Ltd which is a travel agency and runs by her sister Siena. Siena has sent her
an email about the details of the tour, charges and to contact in between a particular time with the
acknowledgement. Isabella sent a reply to her sister Siena on the next day within the time which
has mentioned in the previous mail. However due to negligence of Siena for not paying the
overdue account of email service, the service provider as disconnect the connection which
caused that she did not get the mail within the time. Therefore Isabella’s trip has been canceled.

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Now according to the terms of the postal rule the contract has been formed though an
email between Isabella and Siena. It also satisfied the terms of the contract which includes the
offer and acceptance, consideration, capacity, intention and certainty. Therefore a valid contract
has been formed when Siena sent the email to Isabella with the offer of the tour packages and the
next day when Isabella replied to her within the time with the acceptance of the offer. An offer
and acceptance has found, they have mutual consideration, both of them have an intention to
create a legal contract, both of them are sound mind along with their capacity and certainty
where there is a particular of time period. Therefore a valid contract has been formed between
Isabella and Siena.
According to the terms of the postal rule the effectiveness of the contract has applicable
when the acceptance has been communicated through a mode of communication. Therefore it is
defining the basic rule of the agreement for the communication of acceptance is received. When
a letter has been post therefore an offer has been given and reply to the letter to the offer make
the acceptance of the offers
Conclusion
Therefore according to the cases study, Siena has breached the terms of the postal rule
and Isabella is bound to claim the damages from her.

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Reference
Adam v Lindsell [1818] B & Ald 681
Bressan v Squires Supreme Court of New South Wales [1974] 2 NSWLR 460
Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH House of Lords [1983] 2
AC 34
Entores Ltd v Miles Far East Corpn (1955)
Holwell securities Ltd v Hughes (1974)
Tallerman & Co Pty Ltd v Nathan's Merchandise (1957) 98 CLR 93, 111-112