Acceptance by post and an offeror who sells elsewhere before the letter arrives
On 2 March Gwen Pryce, who runs a stables in England, writes to Tariq Haddad offering to sell him a horsebox for £9,500 and asking him to reply by post. Tariq receives the letter on 4 March and the same day posts a properly addressed and stamped letter accepting the offer. On 5 March, before Tariq's letter arrives, Gwen sells the horsebox to someone else. She sends Tariq no message withdrawing her offer. Tariq's letter reaches her on 6 March.
Which of the following best describes the legal position?
Choose one answer to see the reasoning.
Worked answer
Correct answer D: A contract was made on 4 March when Tariq posted his acceptance, so Gwen is in breach of contract.
THE RULE TO REMEMBER
Where acceptance by post is requested or reasonably contemplated, the acceptance is complete when the letter is properly posted, even if the offeror deals with the subject matter before it arrives.
Acceptance by post and an offeror who sells elsewhere before the letter arrives
Where the offeror invites acceptance by post, the acceptance is complete when the letter of acceptance is posted, not when it arrives. In Adams v Lindsell the defendants offered wool by letter and, not having received a reply when expected, sold the wool to someone else before the plaintiffs' letter of acceptance reached them. The court held them bound: the offeror is treated as making the same offer during every instant the letter travels, and the contract is completed by the offeree's acceptance. Otherwise no contract could ever be completed by post. Gwen asked for a reply by post, so the postal rule applies. Tariq's acceptance took effect when he posted it on 4 March. Gwen's later sale did not undo the contract, and she never communicated any withdrawal. She is therefore in breach of contract.
Why A is wrong: This states the general rule for instantaneous communication; where post is the requested method, acceptance is effective on posting.
Why B is wrong: A sale to a third party does not revoke an offer of itself, and in any event the contract was already formed on 4 March.
Why C is wrong: The postal rule does not depend on the offeror reading, or even receiving, the letter.
Why E is wrong: The contract was formed on posting, not arrival, and good faith is no defence to a claim for breach of contract.
A little more practice done.
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