The Postal Rule in Contract Law

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Table of contents Topic pages Introduction ……………………………………………………………… 1-2 Questions 1 ……………………………………………………………….. 3 Questions 2………………………………………………………………….. 4 Relevant Case ……………………………………………………………….. 5-7 Conclusion ………………………………………………………………….. 8 Introduction Commercial law means is legal rule the determine the right and duties of parties engaged in trade and commerce, govern disputes arising a out of ordinary transaction of buyers and sellers, and settle issues concerned with affreighmnent. The offers an advantages to prospective buyers and allowing for the offer to remain valid the latter is mailed , other than that once the acceptance letter is mailed other than that once the acceptance letter is mailed the deal becomes to legally to hold the countract. Contract law is people doing contract with other parties, contracts has of the controversial issues in the law of contract formation. it raises some questions mark ,the type of rule that should govern the timing of contract formation .a concert debate has been emerged recently as to whether the postal parties .First one examines the justification of the postal rules acceptance then the second part analyses thoroughly the application of postal acceptance rules .Postal rule does not apply to instantaneous forms of communications Postal rule which came about in a time where the main form of business communications was by post .The ruling applies where the means of communications are deemed instantaneous Encores Ltd far East Corpn (1955).Postal rule Through the decades other form of communications have been intend which are now much speedier telex, phone, fax and now instant messaging and email. The general rules in law states that acceptance is communication is and has been relived by the offeror. However, the mail box rule only applies to acceptance other letters do not take effect until the letter is delivered. The postal rule of acceptance when the parties negotiate to a conclusion in each other’s presence there is little problem. There is little danger of uncertainty as to whether agreement has been reached although recollections may differ as to its contents if it has not been recorded. The general rule is that words of acceptance must not only be spoken, they must be heard by the offeror .Thus , if word of acceptance are drowned by a loud noise they must be repeated before the contract is concluded .When the parties not in each in other presence communications becomes a more critical issues . The general principle is that a contract is formed when acceptance is actually communication to the offeror , the postal acceptance postal rule is a term of common law contract which determines the timing of acceptance of an offer when mail is contemplated as the medium of acceptance. Other than that acceptance is deemed to have occurred when the writing was placed in the mail , not when it was relieved by persona making the offer Example for the postal rule happen: A makes an offer to B on January 1, in here the contract start the A decides to revoke the offer on January 2and puts letter in the mail to B revoking the offer, However person B puts a letter accepting the mail on January 3 and does receive revocation letter until January 4 , this can revocation for the latter can be effective only when received that is January 4. The contract was formed on January 3 when the latter of acceptance was posted. its too late to revoke the offer. Second example is Person A makes an offer to b on January 1 and initially B intends to reject the offer on January 2 by putting a letter in the mail to are rejecting the offer, then for next day B change his mind and sends a fax to A accepting the offer .in this situations, which ever communication A received first will govern, Example case for the postal rule is Questions 1 What reasons have been given by the courts for the postal acceptance rule? Reasons courts given postal acceptance rule is the postal rule appears to provide the best solutions in determining the time that the parties reach. Postal acceptance rule files requirement in the law of contract that acceptance has be communication more important is weekends the doctrine of consensuses. Next is modern technologies there is still proof of posting does not guarantee that there has been acceptance other than that, the postal rule not apply where it would lead to manifest inconvenience, In here the mailbox rule applies to acceptance Other latter do not take because can effect to other people. A further exception to the rule that acceptance must be communicated, where acceptance is effected by post. The rule is that where acceptance by post has been requested , or where it is an appropriate is completed immediately the letter of acceptance is posted , even if the latter is delayed destroyed or lost in the post so that it never reached the oferor example Adams v Lindsell ,1818 Household Fire Insurance (etc) Co v Grant , 1879 . It seems that the rule applies to communications of acceptance by cable including inland telemessages but not to instantaneous modes such as telephone, telex on fax machines. Other than that ,Where the latter of acceptance has not been not been properly posted , as in case London and Northern Bank , 1900 Where the latter of acceptance was handed to a postman only authorized to deliver, Furthermore the latter is not properly addressed . There is no direct authority on this point but the analogous case of Getreideimport Gmbh v Contimar , 1953 would support this view ,G .H Treitel, law of Contract ,has suggested that an inflexible rule on this poin might in some cases prejudice the oferor and the better rule is that. However the offeror has chosen to start negotiations through the post and so the risk of delay pr loss the post should be on him or that it leads to business efficiency and enables the offeree to act on a binding contract the moment the acceptance letter is posted ,this jurisdictions have advantageous to the offeree but not the offeror. The court held that the acceptance has been completed once it is posted although here the defendants actually did not received the letter they sold it to some else. During this time ,it a good time or good method to send receive contract agreements via post as everyone live far apart from each other . The courts ready said and has made clear the postal rule is not only applied is reasonable to use it .if an offer was made via telephone then the offeree must reply his acceptance with either the same method of a faster one. Questions 2 What circumstance will the postal rules not operate? Circumstance will the postal rules not operate is where acceptance by post has been resquestance or where its and appropriate and reasonable means of communications between the parties acceptance when the latter of acceptance is postance even if the latter is distroud a lose in the post and it never risers . Postal rules are essentially a rule of convenience and are usually, justified on the ground that if the offeror chooses the post as a means of affecting a contract, they must accept the inherent risks. The postal rule will not apply in the situations given below where the court may conclude that the contract comes into being when the letter of acceptance arrives the, were the contract comes into being when the letter of acceptance arrives, where the offer has lapsed by the time the letter of acceptance arrives, then if the postel rule does not apply , there may be no contract at all. Circumstance will the postal rule not operate is, firstly doing offer the parties accepted the offer after the time period oferre give, because west time offeror to waiting.It is sensible, therefore, for efferor to seek protection against the risk by the postal rule by stipulating that a particular means of acceptance (other that the post) is required or wording the offer to require actual communications of any acceptance. This is precisely what the offeror achieved. Other than that, postal rule not operate because the offeree not give agree or not for the contract. The if the not get receive the latter at the time the offer can change for not operate. Relevant case law Postal rule cases start from Adams v Lindsell in (1818 & Ald 681 In this case have two key requirements of binding contract; the offer must be made by one party. However, is accepted by the offeror, but in this case, established an exception to this know as the postal rule. Defendants wrote to the claimants offering for the sale a quantity of wool this happen on 2 September .They specifically requested the claims reply by post. After a few day the latter was incorrectly addressed but the parties still not receive it until 5 September .on 9 September the defendants received and the claimants decided to accept the offer, the instructed send their acceptance by post. On 9 September the acceptance was received by the defendants. Why presuming the claimants had not decided to acceptance the offer and at the same time defendant s sold the wool to other parties or for the third party the day before they get the received the acceptance letter . In this case the question was whether a valid contract had been formed prior to the being sold .Then courts give the courts give the concluded that it had as soon as the acceptance letter was posted, the defendant ready breached the contract by selling the wool to other parties or third party. “The justification often given for the postal rules is an offeror decides to conduct negotiations by post, they should acceptance the risk of delay. The can avoid this by stating in the offer letter a contract will only be formed once they receive an acceptance, so excluding the postal rule In 1955 courts give the decided the postal rules would not apply for telex .Lastly this decision was followed in 1983, but courts recognized a telex may not reach the recipient immediately. Case Brinkibon v Shahg Stah in (1983) 2 AC 34 For this case about one company in London then the name Brinkibonand the company purchased steel from Stahag, and the company have a saller based in Austria. Brinkibon sent their acceptance to a Stahang offer by Teklek to Vinna. They would only be able to so if the contract had been formed in England. Lords make contract was formed in Vienna. Start from 1955 the use of Telex communication get more feedback and has greatly expanded, and there are many variants on it. The sender and recipients may not be the principle to the contemplated contract. They may be servants or agents with limited authorities. Browning v Johnson (Wash 1967) In this case start from Dr Browning, He wants shell his medical practice and equipment to Dr. Jhonson .The suddenly Browing decided not to sell the parties into a second contract canceling the sale contract ,in this time Browning promised to pay$40,000 to be released from his obligation to sell the practice. Browning later brought suit for sale of the particle was invalid and that therefore the subsequent cancellation contract was invalid for lack of consideration. The case invalid for lack of mutuality and was therefore valid. Then Browning, asserting that the cancellation and contract was invalid due to mutual mistake regarding the validity of the contract. Browning gave Johnson to settle a promise to pay $40,000 to exchange for Johnon’sact of giving up the contract of sale. The consideration the promises if ready make must do it. Consideration important and to support a promise need not always have an actually value the promises, Court said Johnson don’t have any right under contract law. In this case consideration cannot be sham or frivols or manifestly false Holwell Securities Ltd v Hughes (5 –NOV-1973) The defendant granted the plaintiff an option for the purchase of certain land , Which was said to be exercisable by notice in writing to the defendant at a given address within six month , An options is not more than an offer and although the plaintiff posted a letter accepting the offer in questions within the six month period ,it failed to arrive .The Court of Appeal held that the option had not been validly exercised and accordingly there was no contract . the main finding was that the mere word words notice in writing to were sufficient to oust the rule .These words amounted instead to a stipulation that notice must reach the offeror , thus reinstating the general principle of acual communication.. In this case Hughes want sale the house and Hughes want use option was to be exercised “by notice in writing, before a certain date. After settle all the latter, the latter doing so was addressed to the defendant at address and place of work. the subject of the option to purchase is house , All latter posted by ordinary post and enclosed a copy of the letter of the same date .After a few day start from date post the latter, party get after few day , then in same time the defendant offer to other people or third party , because defendant think people not interested for the offer , after offeree make offer to other people , Hughes received the letter from first party first he offer .the courts said the people make the offer not responsible because he ready make contract with first party. Household Insurance v Grant (1879) Mr Grant ready applied for shares in the Household fire and his want carriage Accident Insurance Company. Company ready giving to the defendant and Mr get duly addressed to him. at the same time have incident ,the letters was lost in the post and he never received at the acceptance . company becoming to bankrupt and asked Mr Grant for the outstanding and company said Mr. Grant need to payment on the share because the payments become higher , Mr. Grant still do want to pay the payment and refused saying there was not binding contract., the questions mark was whether Mr Grants offer for share and ready been validly.the casewas that the operating of such a rule is arbitrary since it does not apply to non-postal acceptance and little conscious thought may have been given to the decisions to communicate the acceptance using one form of communications rather than another, e.g. the post compered to hand delivery or acceptance by faxed letter . Bramwell lJ would therefore have preferred the ordinary rule of communications to apply equally to acceptance by post. The most significant part of his judgement is whare he says that the harm he perceives in the postal rule will be obvilated only by the rule being rendered nugatory. Bybe &Co.v.van Tienhoven &co,( 1880) In byrne & Co. v. Van Tienhoven &Co (1880) the courts confirmed the long – standing idea that any revocation of offer must be communicated to the offeree, although again there are some exceptions to this rule. The offeror need to communicate revocation to the offeree himself, however the case it is not communicated by a reliable third party. The questions are then whether revocations send at the same time as ad acceptance will nullify an offer. Conclusions The rules of offer and the postal rule is more important in now because postal rule have more benefits for people now if want doing contract , advantages can get from here people no need west the time to meet or cost for transport and the in postal rule is very few risk .I agreed all about the postal rule is easy and save time .if people have the long distance still do it the contract or averting . Reference
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