Postal rule was an arbitrary choice in the 19th Century. Modern technologies make it redundant. Therefore, it should be abandoned as an obstacle to fairness in contract law.

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Student ID: 200730017

Name:  Katya Varbanova

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MODULE :                        LAW 105

DEGREE CODE:                MN11

YEAR OF STUDY:                2010/2011

SUBMISSION DATE:                10/01/2010

WORD LENGTH:                2491

STUDENT ID NO:                200730017

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Postal rule was an arbitrary choice in the 19th Century. Modern technologies make it redundant. Therefore, it should be abandoned as an obstacle to fairness in contract law.



The postal rule was established by arbitrary choice and it was decided because some rule, that would regulate letter contracting, was essential in the early 19th Century. It was arbitrary, because there was no range of choice for communication and the postal services were the only option for distance contracting. Modern technologies and inventions make it redundant and unfair. In this coursework, I have explored the advantages and disadvantages of the rule and whether it should be justified today. Postal rule is no longer needed because in the 21st Century, contracts can be concluded in seconds, using both instantaneous and non-instantaneous methods of communication with little or no risk of loss and delay. Therefore, it should be abandoned as an obstacle to fairness in contract law.

The Postal Rule for Acceptance

The general rule is that once a letter of acceptance is dispatched, the postal acceptance is already effective. In other words – as soon as the letter is in the control of the Post Office, the contracting parties are legally bound. It was established in 1818 in Adam v Lindsell and it was essentially a rule of convenience.The postal rule is supported by saying that the offeror takes the risk (i.e. the risk of failing to receive acceptance)by initiating negotiations by post originally. As a result, it does not apply to instantaneous methods of communication (i.e. telephone, telex) on the ground that all the parties are aware of contract conclusion. Therefore, they are unlikely to face risks such as delays or failure of transmission.

The Postal Rule for Revocation

However, if it was reasonable to establish a specific postal rule for acceptance, consequently there may be another necessary rule concerning revocations of offers. In the case of communication by post, the general rule is that “Dispatch of a letter or telegram of acceptance by the offeree terminates the offeror’s power of revocation. Loss or delay of the letter of acceptance is immaterial and subsequent death of either party can have no effect on its formation”.  In other words, the letter of revocation is effective only on delivery.

Reasons for the Establishment of the Postal Rule

Generally, the reason for the establishment of the postal rule was to promote certainty within contractual formation. Likewise, in 1818 postal services have been relatively slow as the first train from Liverpool to Manchester had made its first deliveries twenty years later. Consequently, the main problem in the beginning of the 19th Century was that the postal service had no alternative methods of communication. It was Capps who suggested that if instantaneous modes of communication were available, it is doubtful whether effective-on-dispatch rule would have been necessary.

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There are some arguments that it is easier to prove posting rather than receipt. The given reason is that it is the offeror who chooses to use the post and therefore it is he who should be at a disadvantage. Although it is true that he can choose to make the offer using  telephone, the above mentioned reason is not very convincing. It might have been the offeree who originally started the negotiations by letter.

Was it an arbitrary solution?

In truth, it is to some extent an arbitrary solution to the problem of which of the parties should be favoured where ...

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