Origin of the Postal Rule - Essay Example

Postal Rule Origin of the Postal Rule The foundation of the postal rule can be traced back to the 1800s and is found in the lawful principles of various nations. The postal rule is a concept of contract law. It is an exemption to the general rule, which states that, an acceptance is only formed when communicated directly to the offeror. The postal rule states a reception is applicable and the contract satisfactory when the acceptor list the application in a mailbox for return mail to the offeror. This implies that acceptance is binding once the mail is posted. However, this form of bargaining had a setback because the parties involved could not know concurrently whether they had formed a contract. Consequently, a general rule dictating the time of an efficient acceptance was required1. The postal rule was originally invented as an attempt to provide some form of assurance to an offeree acknowledging an offer through post. From the case of Adams v Lindsell [1818] the courts ruled that if the general rule concerning acceptance of an offer is applied to an acceptance sent by post, then an offeree would never truly be certain of the existence of an obligatory deal until the offeror confirms receipt of the letter of acceptance2. The postal rule was applied in this case since post was the singular way of communication. This assignment aims at critically discussing the postal rule its similarities to e-mail and whether it should be expanded to encompass modern modes of communication specially email3. Applicability of Postal Rule to E-mail At its instigation, the post was solely the only means of communication. The introduction of other modes of communication over the years, calls for expansion of the rule to include particularly email since it is the most commonly used method of settling deals. This rule should also extend include e-mail since e-mail is essentially a letter in electronic form. Moreover, at time of inception of the rule, post was expedient and fast; this true for e-mails today hence applicability of the rule to e-mail4. However, it is difficult to classify e-mail as either instantaneous or not since in some cases it may reach the recipient in a matter of seconds and delays are rare. On the other hand, it is common for mails to take longer to reach the recipient hence the postal rule may not stand at this point. Similarities of the Post and Email There are several comparisons between post and e-mail. Firstly, when an e-mail is sent from the sender’s outbox it cannot be recalled and this situation is similar to the postal rule5. Additionally, an e-mail is a digital comparable of a letter sent via post. All usual functions of postal mail happen through e-mail like advertising or invitations to treat (Partridge v Crittenden [1968]). Acceptance through e-mail remains unsettled by courts since there still exists uncertainties on the subjects of offer and reception related to the development of e-mail based contracts. In this case, there are different points of acceptance. It could be the moment when thee e-mail departs from the sender’s outbox, the instant it gets into the recipients inbox, when it is collected from the server or when it is read. This is also analogous to the postal rule as it is not clear when an acceptance is made. In the postal rule an acceptance is binding when the acceptor puts it in the mail box for return mail to the offeror not considering whether it reaches him/her. Since the establishment of the postal rule in the 1800s, several other means of communication have come up. This includes telephone, telegraph, email and facsimile. Both the post and email are both used as avenues of communication since the message/information is delivered finally regardless of the time taken to deliver the message. Another similarity is the greeting cards. When email was first introduced, it did not have things like greeting cards. At the time, only the postal service did. Nowadays, greeting cards can be sent via email and may even come with sounds and songs`. In both e-mail and postal rule, the sender does not have control over when the message will reach its target. Despite of e-mail operating instantaneously, in some cases it does not go directly to its target. The strengths and weaknesses of the postal rule Weaknesses The postal rule operates on the basis of offer and acceptance. This is to say that, an acceptance is efficient and a contract made only when the approval is relayed to the offeror. This is based on two major suppositions that there is substantial delay in delivery of the message with regard to where the message is sent. Additionally, there is a small risk of further delay which may result in the message not reaching its destination at all due to some difficulties. The main problem is that someone, may be, in a situation where they are not sure whether or not the contract has been formed. However, it is not clear who should bear the risk (the offeror or the offeree). Another major criticism of the postal rule is that it favors the offeree. The English case of Household Fire Insurance v Grants is a good example of the probable injustice, lead to the induction of the postal rule. In this case, on reception of a deal from Grant to undertake an insurance policy, the company mailed their acceptance. The letter never arrived. Grant was not aware of the acceptance. It was ruled that a contract existed, and that he was lawfully responsible to pay premiums. Furthermore, when the offeree mails a revocation and then changes his mind and sends an acceptance whichever reaches the offeror first holds. This is a major setback of the rule. Another weakness of the postal rule is in comparison to e-mail. Electronic mail is quicker and more efficient as it can take seconds to communicate the offer while the postal rule may take several days. The postal rule also takes into consideration the address of the recipient because if the letter is wrongly addressed, it either does not reach the intended recipient or goes to the wrong recipient. On the other hand, an e-mail cannot be sent unless the recipient’s address is correct. Strengths One of the strengths of the postal rule is that, the moment an agreement is made and once the receiving party mails a letter affirming this, the offer is considered legitimate. This presents an advantage to potential buyers, permitting the deal to stay legitimate provided the letter is mailed. Once the acceptance letter is posted, the agreement becomes an officially binding agreement. In addition, the postal rule over other forms of communication is writing. One can verify that it is indeed the offeror communicating through the written signature provided on the mail. Is e-mail instantaneous or non-instantaneous? Over the years there have been numerous debates on whether email is an instantaneous or non-instantaneous manner of communication. This has largely been driven by the fact that the postal rule only classifies communications as either immediate or non-instantaneous. Many cases in the 20th century have shown discrepancies in the applicability of the postal rule in email. These discrepancies include erroneous addressing of e-mail, failure to read e-mail by receivers and delays in the internal delivery of e-mails by organizations. These factors demonstrate that e-mail is not an immediate avenue of communication. However, these factors are external to the e-mail communication system and do not necessarily affect the instantaneous nature of e-mail communications. Where there is a direct connection between computers, the e-mail system is immediate regardless of whether there may be delays between the sending and receiving parties of the e-mail information. In this scenario, the e-mail does not pass through a third party. If it goes through a third party, the delay may only be experienced from the processing power of the computer network, technical faults or traffic in communication lines. The intricate path over which the e-mail is dispatched may also cause delays. This usually happens when there is no direct link between the computer systems, for instance, from continent to another. In most cases the e-mail passes through many computer systems owned by third parties before it reaches the recipient. However, the message may take days to be delivered to the recipient even when the sender and the recipient are near each other hence the proposition that e-mail is not instantaneous per say. From the above analysis, it is vivid that it is not easy to classify email as instantaneous or not. However, courts are likely to conclude that e-mail is a ‘virtually instantaneous’ avenue of communication. The postal acceptance rule does not extend to he developed Web-based communications that have taken the market trend. This is because most Web-based systems employee mechanisms such as check-sums to maintain regular communication between the client and server systems. The constant confirmation of this communication guide offers the provision that communications occurs via an immediate send process6. Thus, both parties obtain communications right away. Though the discussions about whether or not postal rule should be applied to e-mail are on-going, there are evidences that the postal rule has been utilized in cases involving telephone, telegram, telex and facsimiles7. In the case of Entores v Miles Fast Enst Corporation, the court drew a difference between telephone and the postal system on the basis that communications via the telephone are virtuously instantaneous and are therefore analogous to face-to-face negotiations between the offeror and offeree8. It is well established that acceptance of an offer by telephone is subject to the general rule that acceptance is reliable until it is defined towards to the offeror. In the case of Cowan v O'Connor the case held with remarkable reasoning, that where an acceptance is communicated to an offeror by telegram, a contract is formed when the telegram is given to the post office for dispatch. Conclusion Should the postal Rule be broadened? Since the introduction of the postal acceptance rule in 1818, several avenues of communication have been invented, including the telephone, telegraph, telex, facsimile and e-mail. Despite the fact that courts have been able to classify new methods of communication as either "instantaneous" or "non-instantaneous", two relatively recent decisions have revealed that confusion may occur when numerous modes of communication are used to accept an offer. These decisions maintain that the process of the postal acceptance rule would be barred when the communication of the offer is via two types of conveyance e.g. telegram or telephone.9 Therefore, the postal rule should be broadened to include other forms of communication to avoid this uncertainty associated with the acceptance of the offer whether on dispatch or on receipt. This is crucial especially in this era of rapid technological advancement and needs to be stated clearly. The general rule of contract law has loop holes since it does not fully address how new forms of communication will be incorporated in the court processes of acceptance of offers by contracting parties. This, therefore, calls for new policies to be enacted to ensure inclusion and full representation of these new digitalized modes of sending information so as to eliminate the gap. The major concern here arises from investigating into whether the postal rule will be applied to acceptances communicated by e-mail and other forms of modern communication. In resolving this issue, it is vital to consider how an e-mail is conveyed, the sphere of the postal acceptance rule and its underlying policy considerations. Despite convincing arguments outlined against broadening the postal rule to e-mail communication, the policies and laws in this area are still at the tentative stages. As a result, contracting parties cannot forecast with any confidence when an acceptance conveyed via e-mail will be successful. Nonetheless, this uncertainty can be evaded by parties to a contract if they exclude the process of the postal acceptance rule. Even though it is often assumed that a lawfully binding agreement will not be affirmed until the e-mail message is received by the offeror, to avoid any indecision, the terms of an offer should be evidently stated when an acceptance of the offer will be effective10. Case Laws Household Fire Insurance Company v Grantlg Hamon-Sobelco Australia Pty Ltd v Reese Bros Plastics Limited, Cowan v O'Connor Mendelson-Zeller v T&C Providores [I9811 1 NSWLR 366 at 369, Entores Ltd v Miles Far East Corporation [I9551 2 QB 327 at 332-334 Tallangalook Pty Ltd v Duketon Goldfields NL Reese Bros Plastic Ltd u Hamon-Sobelco Australia Pty Ltd... Express Airways v Port Augusta Air service Bibliography C, Wright, (2008) “Electronic Contracting in an Insecure World” New York: SANS Institute. K, Skeahan and K, O’shea; “Acceptance of Offers by Email-How Far Should the Postal Acceptance Rule Extend?” Allison, Arthur; Currall, James; Moss, Michael & Stuart, Susan (2003) “Digital Identity Matters” University of Glasgow, UK (August 2003) R,O’Brien, (2007) “Analysis of the Postal Rule Postal Rule Revisited” Bainbridge, D (2000) “Introduction to Computer Law” Harlow : Longman/Pearson Education. S, Smith;O Wallace. (2003). “What is The Mailbox Rule?”Wisegeek. Retrieved on 20 February 2012, from: Beatson, J. (2002) “Anson’s Law of Contract”. 28th Edition, Oxford: Oxford University Press, UK. Beale, H.G., Bishop, W.D. & Furmston, M.P. (2001) “Contract, Cases and Materials”. 4th Edition, London: Butterworths, UK Brown, I. and A. (2005) “Chandler Blackstone’s Q&A Law of Contract”. 5th Edition, Oxford: Oxford University Press, UK Cavazos, Edward A. and Morin, Gavino, (1994) “When Acceptance Becomes Effective: The Mailbox Rule, The Mailbox Rule Revisited, The E-mailbox Rule?” in “Cyberspace and the Law”, Chapter 3, MIT Press, USA Read More