Journal Of International Commercial Law And Technology

5565 words - 23 pages

Journal of International Commercial Law and Technology

Vol.2,Issue 1(2007)

The Postal Acceptance Rule in the Digital Age∗
Dr. Marwan Al Ibrahim
Asst. Professor in commercial and Company law, Amman Arab University for graduate studies – Jordan

Dr.Ala’eldin Ababneh
Assistant Professor in Private Law at Amman Arab University for Graduate Studies-Jordan.

Mr. Hisham Tahat
PHD student, University of Aberdeen Abstract: This article examines the application of the postal acceptance rule to email acceptances. Different views have been argued against the application of traditional rule like the postal acceptance rule, which was established in 1818 as a legal norm in contract formation ...view middle of the document...

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) In contrast, the case of Adams v Lindsell, adopted the rule to avoid “the extraordinary and mischievous” consequences which could follow if it were held that an offer might be revoked at any time until the offeree was in the position of “accepting it had been actually received”. (See, House hold Fire and Carriage Accident
Ins.Co.V. Grant (1879) LR Ex D 216 at 221; see also Re Imperial Land Co of Marseilles (1872) LR 7 Ch App 587 at 594)

This justification for the postal rule appears to provide the best solution in determining the time that the parties reach consensus ad item and it was felt, that at the time of posting the letter, there would be a greater chance of a ‘meeting of minds’ occurring than at the later time when the letter was delivered. (Evans, 1966)

A version of this paper was published in Kierkegaard, S. (2006) Business Law and Technology Vol.1 and presented in the 2006 IBLT Conference, Denmark.

47

Journal of International Commercial Law and Technology

Vol.2,Issue 1(2007)

Another reason has been suggested for the validity of this rule, is that the offeror must be considered as having made the offer throughout the whole time that his offer is in the post, and that therefore, the agreement between the parties is complete as soon as the acceptance is posted. (Henthorn V. Fraser [1892] 2 Ch.27, 31). This idea depends on the assumption that the offer creates a power that binds both parties and that an acceptance is an exercise of that power. Consequently, the offeror has, in the beginning, full power to determine the acts that are to constitute acceptance. However, after the offeror makes that determination, the legal consequences are out of his hands because an offer has then become effective and the offeree has an advantage over...

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