Analysis of the postal rule and its extension to the private courier services

Analysis of the postal rule and its extension to the private courier services

1. Introduction:

Adams v. Lindsell[1], though accepted to be the case that brought forth the postal rule, was not the first case to discuss postal acceptances. This honor falls upon Kennedy v. Lee[2] where Lord Chancellor Elden says:

“The party seeking the specific performance of such an agreement, is bound to find in the correspondence… a proposal met by that sort of acceptance, which makes it no longer the act of one party, but of both.[3]”

 Treitel believes that Adams v. Linsell was not intended by the court to be a general rule that should be followed in every case but was to be an isolated decision.[4] This is so because Lindsell had sent a letter to Adams agreeing to sell him wool but had misaddressed the letter. Therefore, Adams received the letter late, and could not reply in time. The court found for Adams and it can be inferred that the decision of the court was based on the principle of unjust enrichment enveloped by the postal rule. Because, allowing Lindsell to dishonor the contract was unjust, as, had he not mistaken the address, Adams would have received the letter in time and the contract would be binding. Treitel believes that Adams v. Lindsell did not intentionally create the rule but was erroneously inferred.[5]

In light wherein, the judgement that made the rule itself allegedly did not intend to make the rule, it is imperative to look as to why then is this judgement discussed so much. In addition, there are other reasonable justifications that need to be considered. Thus, the aim of the essay is to analyze the justifications provided for the postal rule by various judgements and to discuss its applicability to include courier services as well.

1.1  Ad Infinitum Justification:

The first justification is based on the principle of ad infinitum. Lord Ellenborough in the judgement of Adams v. Lindsell says that:

“no contract could ever be completed by post. For if the [offeror] were not bound by their offer when accepted by the [offeree] until the answer was received, then the [offeree] ought not to be bound till they had received the notification that the [offeror] had received their answer and assented to it. And so it might go on ad infinitum[6]”

Treitel in The Law of Contracts, by Edwin Poole, opines that, it would be reasonable to conclude that the acceptance was concluded when the notice of the said acceptance reached the offeror regardless of whether the offeree was aware of it or not. Such a scenario will not lead to an infinite number of letters.[7] This principle is also one that has been accepted in India, wherein the Indian Contract Act, 1872 stipulates “the communication of acceptance is complete…as against the acceptor, when it comes to the knowledge of the proposer.[8]” Apart from the argument presented above, the postal rule was practically more applicable in the 19th Century. In the modern world, a clause can be inserted in the contract itself that the acceptance would become binding from the time of receipt and not from the time of posting. This extra clause in the contract negates the rule set forth by the court and makes the rule redundant.

1.2  “Common Agent” Justification:

Another important justification provided by the courts is that the post office acts as the common agent for both the parties. This principle was discussed in the case of Household Fire and Carriage Accident Insurance v Grant[9] and Thesiger LJ compounded that:

“…if the post office be such 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.”[10]

However, one fails to understand how the post office can be the ‘common agent’. The judgment does not give any reason for making the post office the common agent. The postal rule in this regard is strongly criticized by Bramwell LJ, dissenting, stating:

“I am at a loss to see how the post office is the agent for both parties. What is the agency as to the sender? Merely to receive? But suppose it is not an answer, but an original communication? What then? Does the agency of the post office depend on the contents of the letter?”[11]

In addition to Bramwell’s perspective, it is also important to note that the agency of the Post Office is only limited to the extent of ‘transmission’ and not ‘reception’ and th