NAME; EDWIN WANYAMA CHELOTI

ADMISSION NUMBER;

INTRODUCTION.

The postal rule is a principle of contract law that states an offer is considered accepted once the
acceptance letter is properly posted, rather than when it is received by the offeror. This rule, a
product of 19th-century common law, has been subject to much debate, especially as modern
forms of communication, such as email and instant messaging, have emerged. These new
communication technologies allow near-instantaneous transmission of acceptance, challenging
the relevance and applicability of the postal rule in contemporary times. This paper will discuss
whether the postal rule should apply to contracts concluded through modern communication
methods, examining its historical foundations and the evolution of contract law in the digital age.
By referencing key case law, this analysis will argue that while the postal rule played a crucial
role in its time, it is increasingly out of step with the realities of modern contract formation.

The Origin and Purpose of the Postal Rule

The postal rule was established in the landmark case of Adams v Lindsell (1818). In this case,
the court held that acceptance of an offer takes effect when a letter of acceptance is posted, not
when it is received by the offeror. The reasoning behind this rule was to provide certainty to
parties entering into contracts in an era when communication was slow and unreliable. At the
time, delays and miscommunication were common, and the postal rule aimed to protect the
offeree from a revocation of the offer while their acceptance was still in transit.

However, this rule is an exception to the general principle that acceptance must be
communicated to the offeror to be effective. In Entores Ltd v Miles Far East Corporation
(1955), the court clarified that, in face-to-face and telephone communications, the contract is
only formed when the acceptance is heard by the offeror, reinforcing the general rule of
communicated acceptance.
Modern Forms of Communication

The advent of electronic communications, such as email, text messages, and instant messaging
platforms, raises the question of whether the postal rule should extend to these forms of
communication. Modern communication methods are typically instantaneous or near-
instantaneous, meaning the need for the postal rule’s protective function may no longer exist.
However, ambiguity in delivery — such as emails going to spam folders or messages being
delayed due to technical issues — can introduce complexities.

In the case of Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelgesellschaft mbH(1983), the
House of Lords held that for instantaneous communication methods, such as telex, acceptance
takes effect when it is received by the offeror, not when it is sent. The reasoning was that these
methods allow for almost immediate communication, allowing the parties to resolve any issues
with non-receipt of the message. By analogy, courts have been reluctant to apply the postal rule
to email and other digital communication, as seen in Thomas v BPE Solicitors (2010). In this
case, the court ruled that an email acceptance sent at 6:00 PM on a Friday evening was effective
upon receipt by the recipient’s email server, even though it was not read until the following
Monday.

This case illustrates that courts are inclined to treat email communication similarly to other
instantaneous forms, such as fax or telex, where acceptance is only effective upon receipt by the
offeror. This interpretation places a greater responsibility on the offeree to ensure their
acceptance is received, aligning more closely with the general rule of communicated acceptance.

Arguments for Applying the Postal Rule to Modern Communication

Despite the trend toward excluding modern communication from the postal rule’s scope, there
are arguments in favor of its continued application. One argument is that, like postal services in
the 19th century, email and other digital communication methods are not entirely foolproof.
Messages can be delayed, misdirected, or intercepted by spam filters. This introduces uncertainty
for the offeree, who may be unsure whether their acceptance has been received.

In Tenax Steamship Co Ltd v The Brimnes (1974), the court found that a notice of withdrawal
sent by telex was effective when it should have been received, rather than when it was actually
read by the recipient. This decision raises questions about whether an email acceptance should be
considered effective when it reaches the offeror’s server, even if the offeror does not read it
immediately. The principle of ensuring fairness for both parties could support extending the
postal rule to email, as it would provide the offeree with greater certainty about when their
acceptance takes effect.

Moreover, the postal rule’s application to electronic communication could be seen as a logical
extension of the original purpose of the rule: to protect the offeree from revocation by the offeror
before the acceptance has been communicated. In an era of rapid digital transactions, where time
is often of the essence, this protection could still serve a useful purpose, especially in cases
where a delay in communication occurs through no fault of the offeree.

Arguments Against Applying the Postal Rule to Modern Communication

However, the counterarguments against extending the postal rule to modern communication are
more compelling. One key reason is that modern technology allows for much more reliable and
immediate communication than was possible during the era when the postal rule was established.
In most cases, email, text messages, and instant messaging platforms allow for near-
instantaneous communication, which reduces the need for the offeree to be protected by a rule
designed to account for slow and unreliable transmission.

In Entores Ltd v Miles Far East Corporation, the court emphasized that when both parties can
interact with one another in real time, there is no need for the postal rule. This logic can be
extended to email and other modern communication methods, which provide the parties with
nearly immediate feedback on whether the message has been sent, delivered, or read.

Furthermore, modern communications often come with built-in confirmations of delivery, such
as "read receipts" for emails or notifications for messaging apps, further reducing the uncertainty
that the postal rule was designed to address. Courts have recognized that in cases of
instantaneous communication, the offeree can easily verify whether their acceptance has been
received, as demonstrated in Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelgesellschaft
mbH.

Moreover, applying the postal rule to modern communication would create practical difficulties,
particularly in determining when acceptance takes effect. For instance, if the postal rule were
applied to emails, disputes might arise over when exactly the email was sent, when it reached the
offeror’s server, and whether the offeror was reasonably expected to read it. This would
introduce uncertainty into what should be a clear and efficient process of contract formation.

Conclusion

In conclusion, the postal rule, while once a crucial aspect of contract law, is increasingly
outdated in the context of modern forms of communication. Case law demonstrates that courts
are reluctant to apply the postal rule to electronic communications, preferring instead to treat
them as instantaneous communications that require receipt by the offeror for acceptance to take
effect. While there are arguments in favor of extending the postal rule to digital communication,
particularly to account for potential delays or non-receipt, the greater reliability and immediacy
of modern communication methods make such an extension unnecessary. As communication
technology continues to evolve, the need for the postal rule is likely to diminish even further, and
contract law will continue to adapt to these changing realities.