Ratio Decidendi
Where acceptance is sent by post, the contract is formed at the moment the letter of acceptance is posted, even if it never reaches the offeror. This is the 'postal rule'.
ਤੱਥ
The defendants wrote to the plaintiffs offering to sell wool, requesting a reply 'in course of post'. Due to the defendants misdirecting their letter, the offer arrived late. The plaintiffs posted their acceptance the same day they received the offer, but by the time it arrived, the defendants had sold the wool to a third party.
ਫੈਸਲੇ ਦਾ ਸਾਰ
The Court of King's Bench held that a binding contract was formed at the moment the plaintiffs posted their letter of acceptance, not when it was received, so the defendants were bound and liable for having sold the wool elsewhere. The defendants' own delay in misdirecting the offer had caused the acceptance to arrive later than it otherwise would have. The court reasoned that if a contract were only formed on receipt of the acceptance, business by post could never be safely concluded: the acceptor would have to await confirmation that their acceptance had been received, and the offeror confirmation of that, and so on without end. Treating the posting of the acceptance as the moment of formation avoided this impasse and placed the risk of postal delay on the offeror, who had chosen to do business by post. This is the origin of the 'postal rule'.
ਮੁੱਖ ਹਵਾਲੇ
"If that were so, no contract could ever be completed by the post. For if the defendants were not bound by their offer when accepted by the plaintiffs till the answer was received, then the plaintiffs ought not to be bound till after they had received the notification that the defendants had received their answer and assented to it."
— The Court
ਬਾਅਦ ਦਾ ਇਲਾਜ
Origin of the postal rule. Qualified in Holwell Securities v Hughes [1974] where the offer stipulated actual communication of acceptance.
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