MAILBOX RULE

INTRODUCTION
• The mailbox rule (also called the posting rule), which is the default rule
under contract law for determining the time at which an offer is accepted, states
that an offer is considered accepted at the time that the acceptance is
communicated (whether by mail e-mail, etc.)
• The rule originated in the British case of Adams v. Lindsell (1818) , when the Court
adopted the doctrine.
• As with most of contract law, the mailbox rule varies from state to state.
• Acceptance may also be considered effective at the time the acceptance letter is
personally delivered, if that is an accepted method, according to the parties.
• The mailbox rule is an exception to the general idea that a contract takes shape
the moment the offeree agrees to the contract in a face-to-face meeting.
• One rationale given for the rule is that the offeror nominates the post office as his
or her implied agent, and thus receipt of the acceptance by the post office is
regarded as receipt by the offeror. The main effect of the posting rule is that the
risk of acceptance being delivered late or lost in the post is placed upon the
offeror. If the offeror is reluctant to accept this risk, he can always expressly
require actual receipt as a condition before being legally bound by his offer.
• If an acceptance is dispatched late, it is ineffective as an acceptance. However, it
will have the legal weight of a counteroffer and the offeror can either accept or
reject the counteroffer.
Assuming that the acceptance was dispatched in a timely manner, it must also be
dispatched in a proper manner. Essentially, this means that the acceptance must
be dispatched via an appropriate medium of communication.
• If an acceptance is mailed before a rejection, a valid contract is made. Because the
acceptance is effective upon dispatch and the rejection is effective upon receipt, a
contract is formed as soon as the acceptance is put in the mail. This is true even if
the offeror receives the rejection first.
• If the rejection is mailed first but the acceptance arrives first, a contract is formed.
In such an instance, the later arriving rejection is not effective as a rejection and
does not absolve the offeree of liability under the contract. However, the offeror
can consider the rejection as a repudiation of the offeree’s contractual obligations.
A repudiation of an acceptance is basically a communication by the offeree stating
that he will not be bound by his acceptance. The difference between a rejection
and repudiation is that a rejection is a rejection of the original offer so that a
contract is never formed. Repudiation is a rejection of a valid acceptance and,
since the acceptance has already formed a valid contract, repudiation is a refusal
to abide by a validly established contract. Repudiation is a form of contract breach,
while rejection prevents the contract from being formed in the first place
 POSTAL RULES
• An offer made by post/letter is not effective
until received by the offeree.
• Acceptance if effective as soon as it is posted.
• For revocation to be effective, it must be
received by the offeree before the post their
letter of acceptance.
 EXAMPLE
• On June 6, Deborah, the offeror, sends a letter to Jeff, the offeree, offering to work
as a freelance graphic designer for a project Jeff needs help with, for a certain
amount of money. In her letter, Deborah states that Jeff has one week to accept
her offer, or it may be changed or revoked. Jeff receives the letter on June 7 and,
the following day, June 8, Jeff sends his acceptance of Deborah’s offer to her by
mail. On June 9, Deborah receives his acceptance letter.
• As per the mailbox rule, Jeff’s acceptance is considered effective as of June 8, due
to Jeff’s reasonable and proper service of his acceptance of Deborah’s offer. This
gives the two a basis for creating the actual contract. Jeff’s response was timely,
since he was given one week to respond, and responded within only a couple of
days. Even if Deborah had received the response after the one-week deadline had
passed – after all, he did send it via “snail mail” – the offer would still be
considered valid, because of the date on which Jeff mailed it out.
• If, however, Jeff mailed his acceptance letter back late, it would not qualify as his
acceptance of Deborah’s offer. Instead, Jeff’s response might be considered a
counteroffer, which could be upheld as such in a court of law. Deborah would then
be permitted to either accept or reject the counteroffer.
 CASE: ADAMS V. LINDSELL
• FACTS: The case involved two parties in the sale of wool. On 2 September,
the defendants wrote to the plaintiffs offering to sell them certain fleeces of wool
and requiring an answer in the course of post. The defendants misdirected the
letter so that the plaintiffs did not receive it until 5 September. The plaintiffs
posted their acceptance on the same day but it was not received until
9September.Meanwhile, on 8 September, the defendants, not having received an
answer by 7 September as they had expected, sold the wool to someone else. The
defendants argued that there could not be a binding contract until the answer
was actually received, and until then they were free to sell the wool to another
buyer.
• JUDGEMENT: Law J said that if that was true it would be impossible to complete
any contract through the post; if the defendants were not bound by their
offer until the answer was received, then the plaintiffs would not be bound until
they had received word that the defendants had received their acceptance, and
this could go on indefinitely.
• Instead it must be considered that the offerors were making the offer to the
plaintiffs during every moment that the letter was in the post. Then when the
Offeree has placed his acceptance in the post there is a fictional meeting of minds,
which concludes the offer and gives effect to the acceptance. The acceptance did
not arrive in course of post strictly speaking (all parties understood in course
of post to refer to 7 September). But because the delay was the default of the
defendant it was taken that the acceptance did arrive in course of post.