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Postal Acceptance Rule

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Introduction

Postal Acceptance Rule Contract is formed at the time and place an acceptance is communicated to the offeror. An acceptance must correspond to the offer. There is no particular method of acceptance prescribed by law. The appropriate method of acceptance will depend on the fact of each situation. The offerees may find themselves faced with two types of situation. First the offer may dictate a method of acceptance. It may indicate that acceptance should be sent by return fax by a certain date. The second broad category is where there is no indication in the offer of an appropriate method of acceptance. The general rule followed by offeree is that acceptance may be given by the same or an equally expedient method as adopted for the making of the offer. Hence it follows that until the acceptance is received by the offeror the offer may be revoked. In the late 19th century an exception to the general agreement for communication of an acceptance arose in order to avoid the extraordinary and mischievous consequences that would follow if it might be held that the offer might be revoked at any time until the letter accepting it had actually been received. ...read more.

Middle

The courts were compelled to examine further policy considerations in order to determine whether the postal acceptance rule should be retained. The courts formed the view that the postal acceptance rule could be justified on the grounds of agency. It was argued that the post office was the agent of the offeror and offeree and that consequently acceptance must be viewed as complete upon delivery to the post office. The argument was that the reason is not satisfactory. "The post offices are only carriers between them. They are agents to convey the communication, not to receive it. The difference is between saying ' Tell my agent A, if you accept' and 'Send your answer to me by A.' In the former case A is to be intelligent recipient of the acceptance, in the latter he is only to convey the communication to the person making the offer which he may do by letter, knowing nothing of its contents. The post office are only agents in the latter sense. The most persuasive reason for wholly rejecting the justification based on agency has been stated by Simon Gardner, who argues that an offeror's agreement to use the post as a means of communicational acceptance "surely does not establish agency. ...read more.

Conclusion

Contract is formed at the moment acceptance takes place. The mistake on the part of mutual agent falls equally upon the shoulders of both and this causes inconvenience or hardship. However this can be counter argued. If an offeror choses he can always make the formation of the contract, however he proposes absolute formation of contract upon actual communication to himself of the acceptance. If the offeror does not receive any reply from the offeree he can always make inquiries to the offeree about the offer. If the contract is not concluded there would be considerable delay in transactions and the acceptor would never be safe until he has received notice that his letter of acceptance had reached its destination. (Source: Kathryn O' Shea and Kylie Skeahan (1997) "Acceptance of offers by E-mail - How Far should the postal Acceptance Rule Extend? " QUT Law Journal, Vol 13, pp 247-262). The nature of postal acceptance rule denotes a separation of parties by time and distance. If each party felt that they were not bound by their assent to contractual terms until they received confirmation of the other's receipt then the situation ' might go on ad infinitum'. Hence no contract would ever be completed by post unless a legal ruling was made on the matter. ...read more.

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