What is acceptance?
Acceptance is an unconditional agreement to an offer. The ordinary rule related to acceptance and communication is that acceptance is effective when it is communicated to the offeror.
What is the postal rule?
The postal rule states that if acceptance is made by non-instantaneous methods, it becomes effective when sent by the offeree, not when communicated to the offeror.
Does the postal rule apply when acceptance is made by telex or email?
The postal rule is not applicable to instantaneous methods of communication.
In Entores Ltd v Miles Far East Corporation (1955) the offer and acceptance were made by telex. The Court of Appeal held that because telex permits almost instantaneous communication, the postal rule did not apply. Acceptance was said to take effect when it was communicated to the offeror.
The House of Lords followed this principle in Brinkibon v Stahag Stahl (1983).
In Thomas v BPE Solicitors (2010), an obiter statement that the postal rule does not apply to acceptance by email was made.
When is acceptance effective if given outside of working hours?
In Brinkibon v Stahag Stahl (1983) the court concluded that if acceptance is made by telex, but outside of working hours, it is not instantaneous. This principle was followed in Thomas v BPE Solicitors (2010).
How does the court determine if the acceptance was made outside of working hours?
In some cases, it is unclear when working hours start and end. In Brinkibon the court held that in such cases they would assess with relevance to the parties; the standard business practices, intention of the parties and where the risk would most fairly lie. This application was followed in Thomas v BPE Solictiors (2010).
To learn more of the facts of these cases, and understand the decisions reached, watch this video.