Adams vs. Lindsell || Case Summary ||1818 1 B & Ald 681 (UK) || Postal Rule and Contract Formation

Postal Rule and Contract Formation

FACTS

The defendants in Adams vs. Lindsell Lindsell, wrote a letter on September 2, 1818, offering to sell wool to the plaintiffs, Adams, and requested a reply by post. Due to a misdirection in addressing the letter, it reached Adams on September 5 instead of earlier. Adams immediately accepted the offer and posted their acceptance on September 5. However, due to the delay, Lindsell assumed Adams was not interested and sold the wool to another party on September 8. When Adams' acceptance letter reached Lindsell on September 9, the defendants refused to honor the contract, leading to a legal dispute.

ISSUES

1. When does acceptance take effect in contracts made via post?

2. Was there a valid contract between Adams and Lindsell despite the delay in communication?

JUDGEMENT

1. The Court ruled in favor of Adams, establishing the Postal Rule of contract law. It held that:

2. Acceptance is complete when the letter of acceptance is posted, not when it is received by the offeror.

3. The contract was formed on September 5, when Adams posted the acceptance, making Lindsell's later sale to a third party a breach of contract.

4. This rule was necessary to prevent unfair delays and uncertainties in contract formation via post.

SIGNIFICANCE

1. Introduced the Postal Rule, which is a key principle in contract law.

2. Ensures that an offeree is protected once they post their acceptance.

3. The rule applies only when post is a reasonable means of communication and does not apply to instantaneous methods like email or fax.

   Vinita Pathak