9th April 2012IntroductionContractual agreement has always been viewed in terms of offer and acceptance. The universal principle to contract law has always been parties may get into an agreement in whichever way they deem fit and they are subject to certain terms as they choose. As far as legal requirements vital to their formation are binding contracts may be formed. Moreover a binding agreement may be manifested in terms of writing or in verbal form. One of the controversial issues in the law of contract formation has always been the issue of distance contracts.
Matters regarding to the types of rules that should be used to govern this type of contracts have always been a topic of debate. One of these rules includes the age old Postal acceptance rule also known as the “postal rule” or the “Mailbox rule”. This paper seeks to examine the justification of the postal acceptance rule and its place in the modern world with the emergence of electronic means of communicationBackground Postal acceptance rule dates back in 1818 when it was established in a court case of (adam v lindsell) In this case the code had to reach a verdict on the moment of contract formation by post.
Apparently the courts found out that the parties communicating acceptance through post office were never certain at the exact time the acceptance had been sent. Since postal communication is subject to delay, the involved parties could never be simultaneously aware of the acceptance of the communication, that is, the communication was non instantaneous. As a result this created a series of problems that in turn led to the formation of the postal acceptance rule that still is in so much use todayThe postal acceptance ruleThe postal acceptance rule as accepted in the law legal systems stipulates that contractual offer will be accepted at the time the letter is sent and not when it is proven received.
Also known as the “Mailbox” Rule it is a concept of the contract law. The postal rule was developed to facilitate contracting at a distance. Initially, bargaining at a distance often posed a great challenge to bargaining parties especially through the postal services.
This was mainly because via the mail parties could not know simultaneously whether they had reached an agreement. As a result a general rule indicating the time of an acceptance had to be established. Consequently the postal acceptance rule was developed. The postal rule function to create an exception to the general rule, which stipulates that an acceptance will only be effective upon receipt The postal rule better understood when described using a functional example. For instance an offeror sends an offer to a second party known as the offeree via post office.
According to the rule of engagement the offeror can decide to revoke or cancel the offer any time before acceptance. This in turn gives the initiator of the deal an upper hand on the bargaining table. This means that the offeree is at a greater loss since once he /she receives the offere he does not know whether the offer still stands or the offeror had already revoked it. Moreover he/she doesn’t know when he is contractually bond since he cannot establish the exact time of receipt of his acceptance.