To form a contract, it usually requires offer and acceptance. Acceptance is an expression by words or conduct of assent to the terms of the offer. It shall be clear, unequivocal and unconditional as prescribed by the offeror. It is a moment when contract exist (that there is consensus ad idem). The general rule of acceptance is been stated in the case of Entores Ltd v Miles Far East Corporation, Lord Denning claims that an acceptance does not usually valid until it is reached to the knowledge of the offeror. This principal also applies to others modes of communications which are (a) Instantaneous means of communication, (b) Postal rule and (c) Others mode of communication.
However, the postal rule is an exception towards general rule for the acceptance. The traditional postal rule stated that the acceptance is valid once it is posted rather than it reaches the knowledge of the offeror. The main reason for this rule is historical, since it dates from a time when a communication through the post was even slower and less reliable than today. This traditional view actually leads to TWO (2) major problems:
(i) There is a delay between the time it is posted which depending to the distance; and
(ii) There is a small risk due to difficulties of the address may leads to further delay or not reached at all .
The age of the earth is around 4600 million years; however it is only 1.8 million years since the evolution of Homo sapiens. We have been gone through Stone Age, Bronze Age, Iron Age and currently in the “Silicon Age”. Apparently the world is entering a Hi-Tech and modern era. In this era, the mode of communication can take many forms: face to face conversations, online business conference, telephone, letters, faxes, or email. A question arises here, as the coming of the next stage of human development, does the postal rules still remains its traditional view? Does the postal rule apply to the modern era communication such as email, courier and others? If yes, how to solve the major problems? If no, what should be the rule of acceptance for the modern era?
Traditional view of Postal Rule
The communication by post may be leads a delay between the sending of an acceptance and reach the knowledge of the offeror. The postal rule origin in the case of Adam v Lindsell, the court held that to require a posted acceptance to arrive at its destination before it could be effective would be impractical and inefficient. This is due to the offeree would not be able to do anything or take any action on the contract until the offeror receive the acceptance. The court felt that this might resulting an ad infinitum situation and do not help in promote business. Things go a bit differently because the postal rule do not only apply to the post but also apply to other non-instantaneous mode of communication.
In the case of Cowan v O’Connor, the postal rule also applies to telegram. It is held that once the telegram is placed in the Post Office, the validity of the acceptance comes immediately. Nowadays, there is no more telegram service; however, postal rule binds to the telemessage service which replaces the telegram service.
The application of the postal rule was differ from cases to cases. In the case of Henthorn v Fraser, the postal rule was applied due to the offeree and offeror are based on different towns. The court felt that despite of handed over in person, postal acceptance is much more reasonable.
Telex service was normally an instantaneous mode of communication. In the case of Entores v Miles Far East Corporation, The House of Lords has held that the acceptance only valid until it receive by the plaintiff which is the offeror. This approach also binds in the case of Brinkibon v Stahag Stahl GmbH. This is because the telex machine has almost immediately received and printed out, which if do not reach the knowledge of the other party, the sender of the telex will need to try again. However, in the both cases, the House of Lords do come with such judgment due to the telex was sent and received in the normal working hours. In the Brinkibon case, the House of Lords said that if the telex message was sent outside working hours, it would not be considered as an instantaneous. Therefore, to determined the application of postal rule through mode of communication is said to be impossible.
Modern era of communication.
From the traditional views of postal rule, it is hardly to determine whether the postal rule does remain its traditional view. This is because in the silicon age, the speed determines everything. This perfectly fits the approach of the postal rule whereas the contract is formed when the acceptance is posted. To discuss this, we have seek toward three modern mode of communication which are:
A. Courier Service
Courier is one of the modern modes of communication. Courier service provides a delivery and logistic service to both domestic and international. This included delivering an offer, acceptance, or legal document. Courier services provide a service which is faster than postal service. However, courier service is much more secure is compare to the mailing service. This is because the courier slip is the contract between the sender and the courier. However in the case of Re London and Northern Bank, the court held that the acceptance must be post properly. What occurs here is the letter of acceptance only handed to a postman whose job is only authorized to delivered mails instead of collecting it. This doesn’t bind courier service due to the authorities of the courier service do have duty to deliver and collect courier. Until today, the jurisdiction do not really apply postal rule to courier service, but it is said that the courier service is much more secure if compare to the mailing why postal rule should not been applied?
B. Electronic Mailing Service
Email, without doubt is an instantaneous mode of communication. However, in the Brinkibon case, the house held that if the telex message was sent outside working hours, it would not be considered as an instantaneous. Question is does same approach can be use for the email case? For the email, it is quite different from other instantaneous modes of communication. Unlike telex and phone, it does not reach the destination immediately. Yet, when it works properly, it occurs instantaneously. It cannot be said there is a delay that would cost lost to any other parties. In the 21st century, after the innovation of phones and portable computer, getting online and receiving email is said to be as easy as answering a phone call. Therefore, it is said to be unwise if the postal rule being affixed to the email service.
Fax service combines both of the technology of telex and photocopy machine. Therefore, it doesn’t bind itself towards the postal rule. Fax being categorize in the instantaneous mode of communication. Thus, the acceptance only come effect when it reach the knowledge of the offeror.
In this 21st century, it is said to be too outdated if the postal rule still being apply in the modern era mode of communication, this is because in nowadays, the speed determined everything and it consume less time if compare to past. To apply postal rule in 21st century is too risky. For example in the case of Household Fire Insurance v Grant, the postal acceptance take effect once it is posted even if it gets lost in the post and never reach the knowledge of the offeror. However in the courier service, it can be entrusted for such duty, this is because if there is an accident happen (except for Act of God) the courier service can be put the blame on.
In email service, things can go the same, especially when sometimes the things go wrong, if the email lost in the middle of nowhere; if the email was delayed due to technical problem; these numerous “if” suggested that the postal rule being applied to the email. It is also possible that the fax service being delayed or even missing. However, due to the development of the technology, all this mode of communication shall be more and more reliable and instantaneous enough.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 12 November 2016
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