Case Facts
The defendants were wool dealers operating at St. Ives, in the county of Huntingdon. The claimants were woollen manufacturers residing in Bromsgrove, Worcestershire. On Tuesday 2 September 1817, the defendants wrote to the claimants offering to sell 800 tods of wether fleeces at 35 shillings and 6 pence per tod, to be delivered at Leicester, paid for by two months' bill, weighed up by the claimants' agent within fourteen days, and requesting an answer "in course of post."
Through the defendants' own error, the offer letter was misdirected to Bromsgrove, Leicestershire, rather than Bromsgrove, Worcestershire. As a result, the letter arrived a day later than it should have done, reaching the claimants at 7 PM on Friday 5 September 1817, rather than on Thursday 4 September. The claimants wrote their acceptance on the evening of 5 September. However, because the return post route ran through London, the acceptance did not reach the defendants until Tuesday 9 September 1817.
On Monday 8 September, not having received any reply by Sunday 7 September as they had expected — had the offer letter been correctly addressed, a reply would ordinarily have arrived by that date — the defendants sold the wool to a third party. The claimants' acceptance arrived the following day.
The claimants brought an action for non-delivery of wool in accordance with the alleged agreement, contending that a binding contract had been formed when they posted their acceptance. The defendants argued, relying on Cooke v Oxley (1790), that no binding contract could exist until the claimants' acceptance was actually received, and that by the time of receipt the defendants had already retracted the offer by selling the wool to others.
At trial before Burrough J at the last Lent Assizes for the county of Worcester, the judge directed the jury that, the delay having been caused entirely by the defendants' own misdirection of the letter, it must be taken as against them that the claimants' answer had arrived in due course of post. The claimants recovered a verdict. The defendants subsequently obtained a rule nisi for a new trial on the ground that no binding contract existed between the parties. That rule was ultimately discharged by the Court of Common Pleas.
Held
The Court of Common Pleas discharged the rule nisi and upheld the claimants' verdict. A binding contract was formed at the moment the claimants posted their letter of acceptance, not when it was received by the defendants. The claimants were accordingly entitled to recover against the defendants for failing to complete the contract.
The Court further held that because the delay in communication arose entirely from the defendants' own mistake in misdirecting the offer letter, it had to be taken as against them that the claimants' reply was received in due course of post. The defendants could not rely on their own error to defeat the existence of a contract.
Ratio Decidendi
The ratio of this case establishes the postal rule: acceptance of a contractual offer communicated by post takes effect at the moment the letter of acceptance is posted, not when it is received by the offeror.
The Court's reasoning proceeded on the following basis. The defendants contended that, until the acceptance was actually received, no contract was complete, meaning they remained free to withdraw. The Court rejected this argument by exposing its logical impossibility: if the contract were only complete upon the offeror receiving the acceptance, then by the same logic the offeree ought not to be bound until they had received notification from the offeror that the acceptance had been received and assented to — "and so it might go on ad infinitum." This chain of reasoning would render it impossible for any contract to be concluded through the post.
Instead, the Court held that the defendants must be regarded in law as continuously making their offer throughout every instant that their letter was in transit to the claimants. Once the claimants accepted that standing offer by posting their reply, the contract was immediately complete and binding on both parties.
The second limb of the ratio concerns the consequences of misdirection. Because the delay in the acceptance reaching the defendants was caused entirely by the defendants' own error in addressing the offer letter, the responsibility for that delay fell upon them. It was therefore to be taken as against the defendants that the claimants' acceptance had been communicated in due course of post. An offeror who causes a delay through their own fault cannot invoke that delay to deny the formation of a contract.
This case is the foundational authority for the postal rule in English contract law. It was adopted and applied in subsequent decisions including Household Fire v Grant (1879) and considered in Stevenson v McLean (1880), and has continued to define the point at which postal acceptance becomes effective.
Obiter Dicta
Not applicable.