What Is Postal Rule in Contract Law

Postal rule is a legal principle that governs the communication of acceptance in a contract through the mail. Also known as the mailbox rule, it states that acceptance of an offer is deemed effective upon dispatch, not upon receipt. This rule applies to offers made through the mail, email, or any other form of communication that does not involve a face-to-face interaction.

The postal rule was first established in the case of Adams v. Lindsell in 1818. In that case, the defendant made an offer to sell wool to the plaintiff through the mail. The plaintiff accepted the offer by return mail, but the acceptance was delayed in transit and did not reach the defendant until after the deadline had passed. The court ruled in favor of the plaintiff, stating that the acceptance was effective upon dispatch, regardless of when it was received.

The rationale behind the postal rule is to provide certainty and avoid disputes over the timing of acceptance. It protects the offeree from the risk of the acceptance being lost or delayed in transit, and holds the offeror responsible for ensuring that their mail is received in a timely manner.

However, there are some exceptions to the postal rule. For example, if the offeror specifies a particular method of acceptance, such as by phone or in person, then the postal rule does not apply. Additionally, if the offeror has reason to believe that the acceptance has not been received, then the postal rule does not apply and acceptance is only effective upon receipt.

It is important to note that the postal rule only applies to acceptance. Offers, revocations, and other communications are not governed by the rule. Also, the rule does not apply to contracts that are required to be in writing, such as real estate transactions, which require physical signatures and delivery.

In conclusion, the postal rule is a key aspect of contract law that governs the communication of acceptance through the mail and related mediums. It provides certainty and helps avoid disputes over the timing of acceptance. However, there are exceptions to the rule, and both parties should take care to ensure that their communications are properly delivered and received.