A contract is formed between two or more parties.

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A contract is formed between two or more parties. In order for a contract to be legally binding there must be offer and acceptance. This simple basis for a contract is not as clear cut as it first appears. In certain circumstances it is often necessary for the two parties to the contract to communicate via post or by other indirect means. This practise gives rise to the problem of whether an acceptance is given when it is posted or when it is received. There is also the issue of whether or not the person posting the acceptance wilfully intended there to be a delay in delivery. The use of electronic mail further ads to the complication as the courts must decide whether or not electronic mail can be classified as instantaneous communication.

Firstly, let us examine the postal rule in order to analyse its possible applications to communication by electronic means. As already stated, the two elements of a simple contract are the offer and the acceptance. The acceptance will only have effect when it is given to the offeror in response to his offer.  Lord Herschell defines the postal rule as:

Where the circumstances are such that it must have been within the contemplation of the parties that ... the post might be used as a means of communicating the acceptance of an offer, the acceptance is complete as soon as it is posted.”

The postal rule is an exception to the general rule of offer and acceptance as normally there is immediate effect when both offer and acceptance are made via direct communication (i.e. telephone or face to face). The postal rule is in place to deal with a problem caused by the circumstance of postal or ‘long distance’ contractual agreements.

The case of Entores Ltd v Miles Far East Corporation is an important case when considering the postal rule and its application. The dictum of Denning L.J suggests two important facts; firstly, a contract made by post is complete as soon as the letter of acceptance is put in the post box. Secondly, the communication of acceptance by means which are “virtually instantaneous” is distinguishable and must “stand on a different footing”. Several examples of circumstances are given by Lord Justice Denning in his ruling. He gives the telex example in which it is clear that if the acceptance is not communicated due to intervening circumstances then it is the duty of the party accepting the offer to ensure that there is acceptance is properly received. Only if A believes his acceptance has been received and it has not, due to a problem at the offeror’s end is the offeror bound. It is his own fault and he will be estopped from claiming he did not receive the message.

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One important point to consider when discussing email communication is the fact that it is often the case that emails are not received instantaneously. It can sometimes be the case that a message sent via email can take hours and sometimes a full day to reach the recipient. This raises the issue of whether or not we classify email as instantaneous communication and thus distinguish it from the postal rule. Lord If we were to apply Denning L.J rationale, we can classify email as instantaneous communication and we must make that important distinction between mail and electronic mail.

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