INTRODUCTION

Section 3 of The Indian Contract Act, 1872 is based on the principle that both the offer as well as
its acceptance ought to be notified to the other party so that the two minds may come together
and may agree on the same thing 1 in the same sense.2 A contract is successful when a valid offer
made is accepted.3 Thus, communication of acceptance becomes one of the essentials of a
binding contract.

Acceptance can be signified to the offeror either through conduct4 or through express words,
written or oral5. Written words would include emails, letters, telegrams, advertisements, etc. and
oral words would include telephone messages.6 When people started to contract from a distance,
the court, in the year 1818 in Adams v. Lindsell7, established the postal acceptance rule to decide
the moment of contract formation by posts. However, today, in the environment of face-to-face
communication or even in distance contracting where an instantaneous method of
communication is used, there is no uncertainty regarding the moment of contracting formation. 8
This article deals with the ‘Post Acceptance Rule’ in the digital age.

RESEARCH QUESTION

This article aims at studying the relevance or the application of ‘Postal Acceptance Rule’ in the
digital age.

DISCUSSION

Paragraphs three and four of Section 4 of The Indian Contract Act, 1872, deal with completion of
communication of acceptance when parties are at a distance and decide to form agreements
through posts or any other non- instantaneous mode of communication.“According to this
section, as against the proposer, communication of acceptance is complete when it is put into the
1
MULLA, THE INDIAN CONTRACT ACT 23 (16th ed. 2018).
2
The Indian Contract Act, 1872, § 13, No. 9, Acts of Parliament, 1872 (India).
3
Republic Medico Surgical Co. v. Union of India A.I.R. 1980 Karn. 168.
4
Brogden v. Metropolitan Railway Co., (1877) LR 2 AC 666 (HL). (UK)
5
Supra note 1 at 24.
6
Id.
7
(1818) 1 B & Ald 681.
8
Paul Fasciano, Internet Electronic Mail: A Last Bastion for the Mailbox Rule, 25 HOFSTRA L. REV. 1542 (1997).
course of transmission to him, so as to be out of the power of the acceptor. However, the
communication is complete when it comes to the knowledge of the proposer, as against the
acceptor.”This is called the postal rule of acceptance.

In cases of non- instantaneous modes of communication such as posts or telegram, there is a risk
that the letter or the telegram might get lost and delayed without the sender’s or the acceptor’s
knowledge.9 With the evolution of modern or instantaneous forms of communication, new rules
and laws had to be made to take into consideration the communication of acceptance through
these modern methods. The“words of Section 3 of Indian Contract Act, 1872 are wide enough to
cover communications by data messages in electronic form.10 So, if communication is made
through instantaneous modes, namely, telephone or telex, the sender or the acceptor is able to
know immediately whether his/ her communication has reached.11”

In“the case of Bhagwandas Goverdhandas Kedia v M/s Girdharilal Parshottamdas & Co.,12, the
Apex Court held that when by agreement, acceptance by post or telegram is authorized, the
contract is complete when the acceptance is put into the course of transmission by the acceptor.
However, this rule does not apply to contracts by telephone since the parties are in the presence
of each other and are able to hear each other’s voice. 13 The ordinary rule that contracts are
complete only when the acceptance is intimidated to the offeror applies in cases of contracts by
telephone.14”

Modern“methods of communication also include electronic mails. It has been debated that e-
mails are not as instantaneous as telephones are. This is because once a message through e-mail
is sent, it goes into a course of transmission and is out of the control of the sender and therefore
resembles a case of dispatch by post. As a general rule, however, it as been concluded that expect
in cases where the sender has an opportunity of immediately verifying the proper communication
of messages, the postal rule will apply. The same is the case with fax messages.15”

9
Supra note 1 at 31.
10
PULLOCK AND MULLA, INDIAN CONTRACT AND SPECIAL RELIEFS ACT 152 (13TH ed. 2006).
11
Supra note 9.
12
AIR 1966, 543, 1966 SCR (1) 656.
13
Id.
14
Id.
15
Supra note 9.
CONCLUSION

There is a general rule that when an offer is accepted and the acceptance is intimidated to the
offeror, contract is concluded. However, Postal Rule of Acceptance, according to which offer
will be accepted when the letter of acceptance is posted and not when it reaches the offeror, is an
exception to this rule. It is applicable in cases of non- instantaneous modes of communication
such as posts. Instantaneous mode of communication, namely, telephone, still applies the general
rule, i.e. contract is concluded when acceptance is intimidated to the offeror. After a lot of
debates, it has been settled that in cases of acceptance through an e-mail, postal rule will be
applicable except in cases where the sender has an opportunity of immediately verifying the
proper communication of messages.