This case established the rule for acceptance of an offer in postal rule.
Facts of the Case
The plaintiffs were woollen manufacturers residing in Bromsgrove, Worestershire. The defendants were dealers in wool at St. Ives, Huntingdon. On 2 September 1817, the defendants wore a letter to the plaintiffs offering to sell 800 tods of wether fleeces at 35s. 6d. per tod to be delivered at Leicester and require the plaintiff to reply their answer by post. The offer letter was misdirected by the defendants, so it was only received by the plaintiffs on 7pm 5 September. On that evening, the plaintiffs agreed the offer and posted their answer via post. The post was misdirected and it was only received by the defendants on 9 September. However, the defendants had on 8 September sold the wool to another person because they did not receive a reply on 7 September as they had expected. (If the letter was not misdirected, it would have arrived on 7 September). Thus, the plaintiffs sued the defendants for breach of contract.
Issue of the Case
Whether there is a valid contract between the plaintiffs and defendants before it was sold to the third party?
Judgment of the Court
The defendants argued that there was no binding contract until the reply letter was actually received.
The Court held that the offer had been accepted as soon as the letter had been posted. The Court explained that if the defendant’s argument is true, then no contract could ever be completed by post. If the defendants were not bound by their offer when accepted until the answer was received, then the plaintiffs ought not to be bound until they had received notification that the defendants had received their answer and agrees to it. So, it might go on ad infinitum (goes on forever). The defendants’ offer is considered in law to be “effective” during the time their letter was travelling. Similarly, the plaintiff’s acceptance ought to be “effective” during the time their letter was travelling too.
The Court held that the contract was completed when the plaintiffs accepted the offer by putting their letter in the course of post as required by the defendant. Hence, the defendant is liable for the breach of contract.
Principle of the Case
An offer is accepted when the reply is posted or in course of post.
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