Communication of Acceptance: Mail and Instantaneous Modes

Question 1

Household Fire & Carriage Accident Insurance Co. v. Grant (1879), 4 Ex. D. 216 (C.A.)
(Post-Box Acceptance Rule)

Issues:
- Was there acceptance even when the letter was not reached?
- Was there valid communication of acceptance?

Answer 1

Rules:
- Post box acceptance rule: Communication of acceptance has occurred soon as it has been sent into the post when offer has been made by mail. Creates a meeting of the minds since the post office is a common agent for the parties with a definitive point of acceptance, and protects against fraud.
- Revocation of offer from offeror only counts before the offeree has submitted communication of acceptance through the post.
- Only applies to post boxes and nothing else, no other type of delivery of mail.
- Only applies when the offer was made through post and it can be implied that (implied agent) communication of acceptance can/should be made through mail.
- Doesn’t always apply in the case that the offer was not made by post (implied agent).
- In a bilateral contract, acceptance must be communicated.

Question 2

Holwell Securities Ltd. v. Hughes [1974] 1 W.L.R. 155, [1974] 1 All E.R. 161 (C.A.)
(Exception Of Post Box Acceptance Rule In Circumstance Of Express Terms)

Issues:
- Did the plaintiffs exercise an option to purchase the property, by posting a letter to the defendant which he never received?
- Does the post box acceptance rule apply in all circumstances, when both parties expect the post to be used as a means of acceptance?

Answer 2

Rules:
- Post box acceptance rule does not apply when notice of acceptance in writing (express terms) is made from the offeror specifically, therefore only acceptance occurs once the offeror receives it.
- Parties could not have intended that the posting of a letter should constitute the exercise of the option in this scenario since the document asked specifically for “notice in writing to the intending vendor”.
- Post box acceptance rule does not apply when its application would be a massive inconvenience in a scenario.
- Parties cannot have intended that there should be a binding contract until the party accepting an offer or exercising an option had in fact properly communicated the acceptance or exercise to the offeror as he wanted it to be (expressed terms).
- Offeror must state that he wants actual receipt of acceptance (in his hands) for the post box rule to not apply.

Conclusion:
- No acceptance since there were expressed terms set by offeror that “notice of acceptance in writing”, therefore the post box acceptance rule does not apply.

Question 3

Eastern Power: Acceptance in Instantaneous Modes of Communication

Answer 3

• In an instantaneous mode of communication then once the message is received is when acceptance occurs.