Janice and Amir (Answer Guideline)

Janice’s letter appears to be an offer within the criteria of Gibson v Manchester City Council and
Storer v Manchester City Council. Students should outline these criteria and apply them to the facts.

Because Amir posts his letter of acceptance, students need to consider whether or not the postal
rule applies. Applying Adams v Lindsell, postal rule probably applies – acceptance takes place as soon
as it is sent, ie: Thursday.

A possible counter argument to this is that Janice asked Amir to let her know by Saturday – and this
‘let me know’ means that there must be actual knowledge of his acceptance – that it must really be
communicated. This necessity for actual communication means that Amir’s acceptance is not good
until Monday when Janice actually opens the letter. To apply this counter argument, students need
to consider the criteria set out in Holwell Securities v Hughes. If this applies, postal rule is negated
and acceptance only takes place on Monday when the letter is opened.

Amir changes his mind. Here there is no authority as to the effect of his change of mind. In addition,
given the two possible positions in point above, two possible outcomes exist.

If the postal rule applies, then a contract has been formed and Amir’s later change of mind cannot
upset this arrangement. However, this seems a somewhat absurd result since Janice learns almost
simultaneously of the acceptance and the rejection. Amir has attempted to reject the offer by a
quicker form of communication than the post. In these circumstances, you could apply the reasoning
of Dunmore v Alexander and state that no contract has been formed between the parties. Counter
with A to Z Baazars v Minister of Agriculture.

The second possible outcome here is that the postal rule never applied and no contract could be
formed until Janice opened the letter. Since she received the rejection at almost the same time, she
is no worse off (see reasoning above) by not having a contract. You might also wish to consider the
application of the rules for instantaneous communications in Entores v Miles Far East Corp and
Brinkinbon Ltd v Stahag Stahl. Should the communication made by telephone be deemed to have
been the first received? If so, there is no contract.