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The post box rule is alive and well and living in cyberspace

legal matters

The College of Estate Management in Reading runs an excellent distance learning diploma in arbitration. Hard-working professionals regularly sign up for the two-year course and then, rather than spend their evenings in the pub and their weekends with their families, fill their spare hours producing written assignments on the law of contract, tort and arbitration and preparing for exams.

Distance learning can be hard enough without the demands of a day job, so the college provides a short residential course to encourage the students with a bit of human contact.

I was privileged recently to be asked to attend as a tutor.One of the tutorials on the law of contract involved the intricacies of offer and acceptance, and I was obliged to brush up on 'the post box rule'. The general rule is that an offer to carry out some work for a price - by way of a tender, for example - can only result in a concluded contract once a final and unqualified assent to the terms proposed is communicated to the tenderer.

However, there is an exception to this rule, if the acceptance is sent by post.

In that case, the acceptance takes effect when the letter of acceptance is posted, not when it is received by the tenderer.

Thus a posted acceptance is effective even though it is delayed or lost in the post and never reaches the tenderer.The rule applies only if it was reasonable to use the post in the first place, which would not be the case if the poster knew there was a postal strike.

While revisiting the ins and outs of the post box rule and its application - is a letter handed to a postman 'posted' and what if the address is incomplete? - I was struck by the sudden realisation that I last looked at all this stuff nearly two decades ago while revising for my finals. It says something for a rule of contract law that in a lifetime of professional practice devoted almost entirely to contractual disputes, it has never come up once.

Support for the notion that the post box rule is an anachronism whose shelf life is prolonged only by the examiners' need to trap the unwary, was gained by the fact that all the relevant authorities on the point date back not to the last century but the one before that.

In fact, the only contemporary case that involves a post box is Blackpool & Flyde Aero Club Ltd v Blackpool BC (1990), in which the claimant flying club was so keen to renew its concession to operate pleasure flights from the councilowned local airport, that it delivered the tender by hand to the council's letter box, where it sat neglected by council employees until after the deadline.

The Court of Appeal found the council liable for breaching an implied contract to consider all tenders submitted in time, without even mentioning the post box rule.

But just before the textbook was confined to the bin, and the students told not to bother, the contemporary words 'fax and e-mail' caught my eye. It turns out that the post box rule may still apply even in these days of electronic communication.

There is no need for the rule where acceptance is made by an instantaneous mode of communication, such as telex, because the sender will know at once whether the attempt to communicate was unsuccessful. Applying the rule, however, a voicemail message ought to take effect when it is dictated, irrespective of when or whether it is received.

Faxes appear to fall between these two applications, since the sender ought to know whether or not the message has been received but will not know whether it was received in a legible format.

On that basis, the successful transmission of an acceptance by fax ought to clinch the deal even if it turns up as gobbledygook at the receiving end.

And what about e-mail? It is instantaneous and you sometimes know if it has not been received, but do you always know that it has? Rest assured - the post box rule is still with us.

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