Adams v Lindsell [1818] is the foundational authority for the “postal rule” in English contract law: an acceptance sent by post is effective the moment it is posted, not when it is received.
Facts of the Case
On 2 September 1817, the defendants (wool sellers) sent a letter offering to sell a quantity of fleeces, requesting an answer “in course of post”. They misdirected the letter to the wrong county, so the claimants did not receive it until 7:00 p.m. on Friday 5 September, when they immediately posted their acceptance. Had the offer not been misdirected, the defendants would have expected a reply by 7 September; hearing nothing by the 8th, they sold the wool to a third party, finally receiving the acceptance on 9 September.
Decision and the “Postal Rule”
The court held a binding contract was formed on the evening of 5 September, when the claimants posted their acceptance. Lord Ellenborough reasoned that if the law required the offeror to be notified before a contract was complete, no contract could ever be concluded by post — the offeree would not be bound until they knew the acceptance was received, and the offeror would then have to confirm receipt of that knowledge, creating an infinite chain.
Discussion and Commentary
- Allocation of risk: because the defendants misdirected the offer, the court held they must bear the risk of being bound before being notified.
- The “open and alive” theory: the offer remained “open and alive” while the letter travelled, letting the claimants “complete” the contract by posting their reply.
- Historical context: the rule was solidified in the 1840s amid massive postal innovation (the uniform penny post, the adhesive stamp), when posting was “notionally equated” with delivery.
- Criticism and rationality: often called arbitrary and criticised for favouring the offeree, it nonetheless usefully limits the offeror’s power to withdraw once acceptance is committed to the post.
- Modern marginalisation: it is an exception to the general rule that acceptance must be communicated and does not apply to instantaneous communications (telex, fax, email, or messaging), which require receipt.
Related Cases
- Dunlop v Higgins (1848): firmly secured the postal rule in English law.
- Byrne & Co v Van Tienhoven & Co (1880): while acceptance is effective on posting, revocation of an offer is effective only on actual communication.
- Household Fire and Carriage Accident Insurance Co Ltd v Grant (1879): the rule applies even if the acceptance is lost in the post.
- Henthorn v Fraser (1892): the rule applies whenever it is within the parties’ contemplation that post might be used.
- Holwell Securities Ltd v Hughes (1974): the rule can be excluded by the offer’s terms (e.g. requiring “notice in writing”) or where it would cause “manifest inconvenience or absurdity”.
- Entores Ltd v Miles Far East Corporation (1955): the postal rule does not apply to instantaneous communications.
- Brinkibon Ltd v Stahag Stahl (1983): the House of Lords approved Entores, affirming that instantaneous communications require receipt.
- Thomas v BPE Solicitors (2010): emails are treated as instantaneous and fall outside the postal rule.