Adams v Lindsell (1818) 1 B & Ald 681, 106 ER 250

Facts
A by letter offered to sell to B certain specified goods, if he received an answer by return of
post. The letter being misdirected, the answer notifying the acceptance of the offer arrived
two days later than it ought to have done. On the day following that when it would have
arrived if the original letter had been properly directed, A sold the goods to a third person.

Held: there was a contract binding the parties, from the moment the offer was accepted,
and B was entitled to recover against A in an action for not completing his contract.

If that were so [the agreement of defendants that until plaintiff's answer was actually received
there could be no binding contract between the parties] no contract could ever be completed
through the post (per curium).

There was a valid contract which came in to existence the moment the letter of acceptance
was placed in the post box.

This case established the postal rule. This applies where post is the agreed form of
communication between the parties and the letter of acceptance is correctly addressed and
carries the right postage stamp. The acceptance then becomes effective when the letter is
posted.

Household Fire and Carriage Accident Insurance Co Ltd v Grant (1879) 4 Ex D 216

Where an offer has been made to a person who is expressly or by implication authorised to
accept it by post, then, as soon as a letter containing an acceptance is posted correctly
addressed to the offeror, the contract is complete, even though the letter never reaches the
offeror.
Issue
Is posting a letter which is never received a communication to the person addressed, or an
equivalent, or something which dispenses with it?
On 30 Sept 1874, G applied by letter for 100 shares in the plaintiff company, and on October
20 a letter allotting 100 shares to him was duly addressed and posted by the company. The
letter never reached G.
The defendant said that the allotment letter had never been received by him, and that he had
heard nothing of the shares until March 1877, when he received a letter demanding 95
pounds, the amount of a call on 100 shares. This be refused to pay, denying that he was a
shareholder, and on that the action was brought by the plaintiffs.

My view of the effect of Dunlop v Higgins (1) is that taken by JAMES, LJ, in Harris' Case
(2) where he speaks (7 Ch App at pp 591, 592) of the former case as

“a case which is binding upon us, and in which every principle argued before us was
discussed at length by the Lord Chancellor in giving judgment. He, meaning the Lord
Chancellor arrived at the conclusion that the posting of the letter of acceptance is the
completion of the contract; that is to say, the moment one man has made an offer, and the
other has done something binding himself to that offer, then the contract is complete, and
neither party can afterwards escape from it.”
I have referred, that the minds of the two parties must be brought together by mutual
communication.
The question involved in the present appeal is whether the same principle should be applied
in a case in which the letter of acceptance, though duly posted, is not delivered to the person
to whom it is addressed.

Arguments for Postal Rule:

i. Dunlop v Higgins- “Whether that letter be delivered or not is a matter quite
immaterial, because for accidents happening at the Post Office he is not responsible.”
In short, LORD COTTENHAM, LC, appears to me to have held that, as a rule, a
contract formed by correspondence through the post is complete as soon as the letter
accepting an offer is put into the post, and is not put an end to in the event of the letter
never being delivered.
“If the contract, after the letter has arrived in time, is to be treated as having been
made from the time the letter is posted, the reason is that the contract was actually
made at the time when the letter was posted.”
 ii. The posting of the letter of acceptance is the completion of the contract; that is to say,
the moment one man has made an offer, and the other has done something binding
himself to that offer, then the contract is complete, and neither party can afterwards
escape from it.”
iii. There it was held that the acceptance of the offer at all events binds both parties from
the time of the acceptance being posted, and so as to prevent any retractation of the
offer being of effect after the acceptance has been posted.- Re Imperial Land Co  of
Marseilles, Harris' Case (1872)
iv. But if the Post Office be such a common agent, then it seems to me to follow that, as
soon as the letter of acceptance is delivered to the Post Office, the contract is made as
complete and final and absolutely binding as if the acceptor had put his letter into the
hands of a messenger, sent by the offeror himself as his agent, to deliver the offer and
receive the acceptance. 
“Dunlop v Higgins (1) decides that the posting of a letter accepting an offer
constitutes a binding contract, but the reason of that is, that the Post Office is the
common agent of both parties.”
v. If be trusts to the post, he trusts to a means of communication which as a rule does not
fail, and if no answer to his offer is received by him, and the matter is of importance
to him, he can make inquiries of the person to whom his offer was addressed.
vi. LORD COTTENHAM, LC, went on to illustrate his meaning, and did so in the
following terms (ibid):

“It is a very frequent occurrence that a party having a bill of exchange which he
tenders for payment to the acceptor, and payment is refused, is bound to give the
earliest notice to the drawer. That person may be resident many miles distant from
him; if he puts a letter into the post at the right time, it has been held quite sufficient;
he has done all that he is expected to do as far as he is concerned; he has put the letter
into the post, and whether that letter be delivered or not is a matter quite immaterial,
because for accidents happening at the Post Office he is not responsible.”

Arguments against postal rule

i. Whatever in abstract discussion may be said as to the legal notion of its being
necessary in order to the effecting of a valid and binding contract that the minds of the
parties should be brought together at one and the same moment, that notion is
 practically the foundation of English law upon the subject of the formation of
contracts. Unless, therefore, a contract constituted by correspondence is absolutely
concluded at the moment that the continuing offer is accepted by the person to whom
the offer is addressed, it is difficult to see how the two minds are to be brought
together at one and the same moment. Adams v Linsell
ii. Although a contract is complete when the letter accepting an offer is posted, yet it
may be subject to a condition subsequent that, if the letter does not arrive in due
course of post, then the parties may act on the assumption that the offer has not been
accepted, can hardly, when contrasted with the rest of his judgment, be said to
represent his own opinions as to the law upon the subject. The contract, as he says (7
Ch App at p 596) “is actually made when the letter is posted.” - British and American
Telegraph Co  v Colson 
Held (per THESIGER, LJ, and BAGGALLAY, LJ, BRAMWELL, LJ, dissenting) the
contract to take the shares was complete when the letter of allotment was posted, and G was
liable to pay calls made on the shares.

Byrne v Van Tienhoven (1880) 5 CPD 344

The withdrawal of an offer, made and accepted by letters sent through the post, is
inoperative if the notice of withdrawal does not reach the person accepting until after the
letter of acceptance has been posted, unless authority has been given to notify a withdrawal
by merely posting a letter.
Facts
The defendants, in Cardiff, on 1 October by letter offered to sell to the plaintiffs, in New
York, 1000 boxes of tin plates, subject to their reply by cable on or before 15 October; "terms
four months bankers' acceptances against shipping documents". The plaintiffs received the
letter 11 October, and the same day accepted it by cable. Meanwhile, on 8 October, the
defendants wrote revoking their offer; and this letter reached the plaintiffs on 20 October.

Hindley J
This was an action for the recovery of damages for the non-delivery by the defendants to the
plaintiffs of 1000 boxes of tin plates, pursuant to an alleged contract. The action was tried at
Cardiff before myself without a jury, and it was agreed at the trial that in the event of the
plaintiffs being entitled to damages, they should be £375. The defendants carried on business
at Cardiff, and the plaintiffs at New York; and it takes 10 or 11 days for a letter posted at
either place to reach the other. The alleged contract consists of a letter written by the
defendants to the plaintiffs on 1 October 1879, and received by them on the 11th, and
accepted by telegram and a letter sent to the defendants on 11 and 15 October respectively.
Defences
i. the offer made by their letter of 1 October was revoked by them before it had been
accepted by the plaintiffs by their telegram of the 11th or letter of the 15th. On 8
October the defendants wrote and sent by post to the plaintiffs a letter withdrawing
their offer of the 1st. This letter reached the Plantiffs on the 20th.
This letter of 8 October reached the plaintiffs on 20 October. On the same day the plaintiffs
telegraphed to the defendants demanding shipment, and sent them a letter insisting on
completion of the contract. This letter is followed by one from the defendants to the plaintiffs
of 25 October refusing to complete.
There is no doubt that an offer can be withdrawn before it is accepted, and it is immaterial
whether the offer is expressed to be open for acceptance for a given time or not: (Routledge v
Grant (1828), 4 Bing 653). 
(a) Whether a withdrawal of an offer has any effect until it is communicated to the
person to whom the offer has been sent. - As regards the first question, I am aware
that Pothier and some other writers of celebrity are of opinion that there can be no
contract if an offer is withdrawn before it is accepted, although the withdrawal is not
communicated to the person to whom the offer has been made. The reason for this
opinion is that there is not in fact any such consent by both parties as is essential to
constitute a contract between them.
(b) Whether posting a letter of withdrawal is a communication to the person to
whom the letter is sent. - The offer was posted on 1 October. The withdrawal was
posted on the 8th and did not reach the plaintiff until after he had posted his letter of
the 15th accepting the offer. It may be taken as now settled that where an offer is
made and accepted by letters sent through the post the contract is completed the
moment the letter accepting the offer is posted (Harris's Case (1872), 26 LT 781; 7
Ch App 587; Dunlop v Higgins (1848), 1 HL Cas 381), even although it never
reaches its destination (Household Fire, etc, lnsurance Company v Grant (1879), 41
LT 298; 4 Ex D 216, qualifying, if not overruling, British and American Telegraph
Company v Colson (1871), 23 LT 868; LR 6 Exch 108).
The withdrawal by the defendants on 8 October of their offer of the 1st was inoperative, and a
complete contract binding on both parties was entered into on 11 October, when the plaintiffs
accepted the offer of the 1st, which they had no reason to suppose had been withdrawn.
It appears to me that both legal principles and practical convenience require that a person
who has accepted an offer not known to him to have been revoked shall be in a position
safely to act upon the footing that the offer and acceptance constitute a contract binding on
both parties.

ii. The defendants' next defence is that, as the plaintiffs never sent a banker's acceptance
on London or Liverpool as stipulated in the contract, they cannot maintain any action
for its breach.- It is sufficient to say that, whilst the plaintiffs were always ready and
willing to perform the contract on their part, the defendants wrongfully and
persistently refused to perform the contract on their part; and before action there was a
breach by the defendants not waived by the plaintiffs.
Held:
-that the revocation was inoperative, and the contract was complete on 11 October.
-also: that though the acceptances sent by the plaintiffs were not bankers' acceptances as
stipulated by the contract, yet, there being a continuing refusal on the part of the defendants
to perform the contract, the plaintiffs were entitled to sue for its breach.

Hyde v Wrench (1840) 49 ER 132

*see worksheet 2
THE MASTER OF THE ROLLS [Lord Langdale]:
To constitute a valid agreement there must be a simple acceptance of the terms proposed.
Under the circumstances stated in this bill, I think there exists no valid binding contract
between the parties for the purchase of the property. The Defendant offered to sell it for
£1000, and if that had been at once unconditionally accepted, there would undoubtedly have
been a perfect binding contract; instead of that, the Plaintiff made an offer of his own, to
purchase the property for £950, and he thereby rejected the offer previously made by the
Defendant. I think that it was not afterwards competent for him to revive the proposal of the
Defendant, by tendering an acceptance of it; and that, therefore, there exists no obligation of
any sort between the parties; the demurrer must be allowed.
R v Clarke (1927) 40 CLR 227
A reward was publicly offered by the Government of Western Australia ‘for such information
as shall lead to the arrest and conviction of the person or persons who committed the
murders’ of two police officers. C who knew of the offer, gave information that led to the
arrest of one person, and the conviction of that person and another for the murder of one of
those officers. By petition of right under Crown Suits Act 1898, C claimed payment of the
reward.
Held unless petitioner had performed the condition of the offer acting on the faith of or in
reliance upon the offer, there was no acceptance of the offer, and, therefore, no contract
between the parties.
An offer cannot be accepted unless it has been communicated to the offeree. In other words,
the offeree must be aware of the offer at the time of his or her acceptance.

Carlill v Carbolic Smoke Ball Co.

*see worksheet 2
Acceptance too must be communicated. In most circumstances, silence does not amount to
acceptance.

Usually, only the person to whom the offer is made can accept.

Whether or not there has been acceptance is judged by an objective standard. As with offers,
there are many ways of framing the applicable test. For our purposes, we can ask whether a
reasonable person, who happened to have been present when the purported agreement was
reached, would have concluded that the offeree had accepted the offer, even if the offeree had
not meant to accept.

Tinn v Hoffman (1873)

Facts
Mr Hoffman wrote to Mr Tinn with an offer to sell him 800 Tons of Iron. He explained that
the would like the reply to the offer to be by post. Before the letter arrived at Mr Tinn’s
office, Mr Tinn had already sent an offer (similar terms with Mr Hoffman’s offer) to Mr
Hoffman’s office.
The question for the court was whether a contract had been created and if yes on who’s terms.
The court found that a contract had not been created. In order for a valid contract to be
created there must be offer and communication between the parities on acceptance of that
offer. As no communicate had taken place no contract had ever existed.
This case concerned the validity of these two cross offers.

Held
It was held in this case that there was no contract between Mr Tinn and Mr Hoffman for the
iron. The cross offers were made simultaneously and without knowledge of one another; this
was not a contract that would bind the parties for the iron. There is a difference between a
cross offer and a counter offer. In order to form a valid contract, there must be
communication that consists of an offer and acceptance. There was no acceptance by post, as
had been stated in the offer. The court also said that while post had been indicated in the
offer, another equally fast method would have been successful, such as a telegram or verbal
message.

Butler Machine Tool Co Ltd v Ex-‐Cell-‐O Corp Ltd [1979] 1 All ER

Ex-Cell-O wished to purchase a machine from Butler. Butler sent out a quotation of £75,535
along with a copy of their standard terms of sale. The terms included a price variation clause
and a term that the seller's terms would prevail over any terms submitted by a purchaser. The
machine would be delivered in 10 months. Ex-Cell-O put in an order for the machine at the
stated price and sent a set of their terms which did not include the price variation clause. The
order contained an acknowledgement slip which required a signature by Butler and was to be
returned to Ex-Cell-O. This slip stated that the contract would be subject to the terms stated
overleaf. Butler duly signed the slip and returned it. The machines were then delivered and
Butler sought to enforce the price variation clause and demanded an extra £2,893. Ex-Cell-O
refused to pay.

Issue:
(a) On whose terms was the contract made?
(b) Is butler breaching the contract?
Held:
The offer to sell the machine on terms provided by Butler was destroyed by the counter offer
made by Ex-Cell-O. Therefore the price variation clause was not part of the contract. The
contract was concluded on Ex-Cell-O's terms since Butler signed the acknowledgement slip
accepting those terms. Where there is a battle of the forms whereby each party submits their
own terms the last shot rule applies whereby a contract is concluded on the terms submitted
by the party who is the last to communicate those terms before performance of the contract
commences. 
On this basis, the court found that the contract was completed without the price variation
clause and therefore the seller could not increase the cost of the tool.
Denning laid out the traditional test for the contract: the quotation of the price was an offer
subject to terms and conditions and the order by Ex-Cell-O constituted a counter-offer which
Butler accepted. However he also lays out a "better way" to analyze such situations applying
an objective test of the conduct and language. Lord Laughton & Bridge discuss general
principles of offer & acceptance and determine that generally in such situations the last of the
forms (the "last shot") is the victor. They find the tear away slip being returned as the offer
being accepted from the buyer's and their terms, and find the letter that accompanies this
from the seller to be just reiteration of price.   

Felthouse v Bindley (1862) 11 CBNS 869

Facts
A nephew discussed buying a horse from his uncle. He offered to purchase the horse and said
if I don't hear from you by the weekend I will consider him mine. The horse was then sold by
mistake at auction. The auctioneer had been asked not to sell the horse but had forgotten. The
uncle commenced proceedings against the auctioneer for conversion. The action depended
upon whether a valid contract existed between the nephew and the uncle.

Held:
There was no contract. You cannot have silence as acceptance.
Willes J
Although the nephew intended the uncle to have the horse, he had done nothing to
communicate this intention to the uncle, or to bind himself. Therefore there was no contract
to pass the property in the horse to the uncle.
Brogden v Metropolitan Ry Co (1877) 1 QB 256
Facts
 In this case the directors of the Metropolitan Railway Company had brought an action
against Messrs. Brogden & Co. to recover damages for a breach of contract. The
defence was that there was no such contract.
 The Defendants in the action (the present Appellants) were colliery owners in Wales.
From the beginning of 1870 the Defendants had supplied the Plaintiffs with coal and
coke for the use of their locomotives. The quantities supplied and the prices charged
were sometimes varying, and it appeared that, in November, 1871, a suggestion was
made in writing by Mr. Hardman (the manager for the Defendants) that a contract
should be entered into between the parties.
 This draft contained the following sentences: "The contractors [which meant Brogden
& Co. ] shall, at their own expense, as from the 1st day of January, 1872 (but subject
as hereinafter expressed) supply every week and deliver, in narrow guage railway
waggons, for the use of the company, at the Paddington Station of the Great Western
Railway, 220 tons of coal, and any farther quantity of coal, not exceeding 350 tons per
week, at such times and in such quantity as the company shall, by writing under their
agents' hands, from time to time require." The coal was to be "from the best Bwllfa
Merthyr four feet seam" and from no other. The payment was to be at the rate of 20s.
per ton of 20 cwt., the money payable for the same being subject to the existing tolls
payable at the date of the agreement to the Great Western Railway Company, "but
should the existing tolls be advanced or reduced, the price per ton to be advanced or
reduced accordingly." Should the contractors make default or become bankrupts, the
company was to be at liberty to terminate the agreement by notice.
This paper was prepared by Mr. Burnett, who handed it to Mr. Hardman for approval by the
Defendants. Mr. Hardman submitted it to Mr. Alexander Brogden, the head of the firm of
Brogden & Co., who dealt with it thus: He left the date in blank. He filled up the part
describing the parties by putting in the names of himself and partners.
 An action for damages as for breach of contract was then brought. The Defendants
denied the existence of any contract for the supply of coals. The special case was
argued before the Court of Common Pleas, and judgment was ordered to be entered
for the Plaintiffs, and the damages were assessed at £9643. 
 For the Respondents it was argued that everything had been done here which was
necessary to constitute a binding contract.
 A proposition had been made, the duly authorized agents of the two parties had met to
consider it; what they had agreed to was reduced into writing, with only such blanks as
could easily be filled up, without the fillings-up constituting in the least degree (except
perhaps in the name of the arbitrator) new propositions; the paper was sent to one of the
principals, and he returned it to the other with the word "approved," and with his
signature attached. As to the name of the arbitrator, if that was to be treated as a new
proposition, it was a proposition made by Mr. Brogden, and at once accepted without
observation by the other side. There needed nothing more. 
Issues
When a dispute arose, the issue in this case was whether there was a contract between
Brogden and the Metropolitan Railway and if the written agreement they had was valid.

 The House of Lords held that there was a valid contract between suppliers, Brogden and
the Metropolitan Railway. The draft contract that was amended constituted a counter
offer, which was accepted by the conduct of the parties. The prices agreed in the draft
contract were paid and coal was delivered. Although there had been no communication of
acceptance, performing the contract without any objections was enough.
Held
That these facts, and the actual conduct of the parties, established the existence of such a
contract, and there having been a clear breach of it B must be held liable upon it.

B. was the chief partner in a partnership of three persons. The word "approved" written by
him and signed with his name was treated as an assent binding on all the partners (whose
names were mentioned in the paper), although the usual form of signature of the partnership
was that of "B. & Sons."

A mere mental assent to the terms stated in a proposed contract would not be binding, but
acting upon those terms, by sending coals in the quantitles and at the prices mentioned in it,
amounted to sufficient to shew the adoption of the writing previously altered and sent, and to
constitute it a valid contract.
Per LORD BLACKBURN:- The onus of shewing that both parties had acted on the terms of
an agreement which had not been, in due form, executed by either, lies upon the party who
rests his case on that circumstance.

Powell v Lee (1908) 99 LT 284

The plaintiff had applied to the mangers of a school to become the principal. They considered
his application and by a narrow vote they had decided to appoint him as principal. After the
vote an unauthorized person had contacted the plaintiff by telegram to inform of the outcome
of the vote. But the managers had later come together and decided to retract their former
decision and appoint someone else.

Held
The plaintiff was not successful in court because the form of communication of the
acceptance was not an effective form of communication. Furthermore, the acceptance was
given to him by someone who was not authorised and consequently there was no valid
acceptance or breach of contract. (Green, 2013)

Holwell Securities v Hughes [1974] 1 All ER 161

By cl 1 of an agreement dated 19 October 1971 made between the defendant of the one part
and the plaintiffs of the other, the plaintiffs were granted an option to purchase certain
freehold property from the defendant. Clause 2 of the agreement provided: 'THE said option
shall be exercisable by notice in writing to the [defendant] at any time within six months from
the date hereof … ' On 14 April 1972 the plaintiffs' solicitors wrote a letter to the defendant
giving notice of the exercise of the option. The letter was posted, properly addressed and
prepaid, on 14 April, but it was never in fact delivered to the defendant or to his address. No
other written communication of the exercise of the option was given or sent to the defendant
before the expiry of the time limit on 19 April. In an action against the defendant seeking
specific performance of the option agreement, the plaintiffs contended that, since a
contractual offer could be accepted by posting a letter of acceptance, the time of acceptance
being the moment of posting, the option had been validly exercised when their letter of 14
April was posted.
Held – The option had not been validly exercised. The rule that an acceptance of an offer
could be affected, so as to constitute a binding contract, merely by posting a letter of
acceptance, did not apply when the express terms of the offer stipulated that the acceptance
had to reach the offeror. The requirement in cl 2 of the agreement that the option was to be
exercised by 'notice in writing to' the defendant meant that the written document had to be
communicated or notified to the defendant and was inconsistent with the application of the
rule that the mere posting of the document was sufficient. Furthermore, since the option
agreement was an 'instrument affecting property', within s 196(5) of the Law of Property Act
1925, the provisions of s 196(4) were incorporated into the agreement; those provisions were
inconsistent with the rule that the posting of a letter was sufficient since they contemplated
that a notice would only be effective when it was delivered.

Entores Ltd v Miles Far East Corp [1955] 2 QB 327

The plaintiff company in London made an offer by Telex to the agents in Holland of the
defendant corporation whose headquarters were in New York, and their offer was duly
accepted by a communication received on the plaintiffs' Telex machine in London.

The plaintiff company sought leave to serve notice of a writ on the defendant corporation in
New York claiming damages for breach of the contract so made:—

Held that, although where a contract is made by post acceptance is complete as soon as the
letter of acceptance is put into the post box, where a contract is made by instantaneous
communication, e.g., by telephone, the contract is complete only when the acceptance is
received by the offeror, since generally an offer must be notified to the offeror to make a
binding contract; and that, since communications by Telex were virtually instantaneous, the
contract in this case was made in London. Accordingly it was a proper case for service out of
the jurisdiction under R.S.C., Ord. 11, r. 1 (e ).1
Denning: The contract is only complete when the acceptance is received by the offeror: and
the contract is made at the place where the acceptance is received.
Brinkibon Ltd v Stahag Stahl [1983] AC 34
Facts

The complainants, Brinkibon Ltd, were a company that was based in London. They were
buying steel from the defendants, Stahag Stahl, who were sellers based in Austria. The
complainants sent their acceptance of the offer by Telex, which was to the defendants in
Vienna. Brinkibon Ltd later wanted to sue Stahag Stahl for breach of contract and applied to
serve an out of jurisdiction party.

Issues

The issue in this case concerned where the contract was formed, as the breach of contract
could only be dealt with under English law if the contract was formed in England. Otherwise,
as the defendant’s argued, the contract would be dealt with by Austrian law. The court had
held that the contract was created in Austria and this decision was appealed. Another issue in
the appeal was when the formation of a contract would be when using instantaneous
communication, such as Telex.

Held

The appeal was dismissed and the courts held that the contract was formed in Austria and the
breach of contract would have to go through Austrian courts. As the communication of
acceptance was received by Telex in Vienna, this was when the contract was created. The
court reaffirmed Entores v Miles Far East Co, which stated that the postal rule did not apply
to instantaneous forms of communication, which would include Telex. However, the court
also stated that there was no universal rule and each case would have to be resolved by
looking at the intention of the parties and sound business practice.