The postal acceptance rule was first established in the case of the court of Adams v Lindsell ([1818] 1 B &Ald, 681) when the court had to decide the moment of contract formation by post. The court found that parties when communicating acceptance by post were not sure at the precise time the acceptance had been communicated. As postal communication is subject to delay, the parties could not be simultaneously aware of the communication. This created a number of problems and has led to a formulation of the rule. (Yamaguchi, 2004) This rule as accepted in the common law legal systems is:
“Where the circumstances are such that it must have been within the contemplation of the parties that, according to the ordinary usages of mankind, 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”. (Adams v Lindsell [1818] 1 B &Ald 681 and Henthorn v Fraser [1892] 2 Ch 27 at 33) The uncertainty regarding the moment of contract formation does not happen in the environment of face-to-face communication or even in distance contracting where an instantaneous method of communication is used. In this kind of contracting, all parties are aware of contract conclusion and they do not face problematic issues such as delay or failure of transmission which occur in non-instantaneous communications. (Fascianp, 1996-97)
Download the full pdf: SSRN-id1498322
Author(s): Marwan Al Ibrahim et al.