The landmark case of Adams v Lindsell (1818) revolves around the formation of contracts via postal communications, setting a crucial precedent in contract law known as the “postal rule”. The case is fundamental for understanding how contracts are established in scenarios where communication delays are inherent. In this summary you will learn everything you need about this case.

  • In the case of Adams v Lindsell (1818) 1 B. & Ald. 681 it was held that where an offer was accepted by post, acceptance took effect at the date of posting.
  • The “postal rule” was developed.

Facts of the Case

  • D challenged a decision that they had breached a contract for the sale of wool to the claimants.
  • On September 1817, D had written to C offering to sell some wool and asking for an answer “in course of post”.
  • D’s letter however was wrongly addressed and a delay in correcting this issue meant the letter did not reach C until the evening of September 5th.
  • At that time, C wrote an answer, agreeing to accept the wool on the terms proposed.
  • The answer, sent in the ordinary course of post, was received by D on September 9th.
  • However, they had sold the wool to another person on September 8th.
  • The judge at first instance held that the delay had been caused by D, so they were liable for C’s losses
  • D appealed.

Issues in Adams v Lindsell (1818) 1 B. & Ald. 681

  • Where was the point of acceptance when using a letter as a form of written acceptance.

Held by Court of King’s Bench

  • The judgment held in favour of C and D had been in breach of contract.

Law J

  • D had to be considered in law as having made, during every instant of time their letter was travelling, the same identical offer to C.
  • The contract was completed by the acceptance of the offer by C.
  • The delay had arisen entirely from D’s mistake, and it had therefore to be held against him.

Significance of the Case in Legal Development

Adams v Lindsell (1818) has had a profound impact on contract law and this case is often discussed in conjunction with several other cases:

  1. Henthorn v Fraser (1892): This case further examined the postal rule, confirming its applicability when the parties are at a distance from one another.
  2. Entores Ltd v Miles Far East Corporation (1955): This case explored the rule in the context of modern communication technologies like the telex, contrasting with the postal rule by establishing that acceptance is effective when received.
  3. Brinkibon Ltd v Stahag Stahl (1983): It examined the application of the rule in even more contemporary scenarios, emphasizing the importance of context in determining the moment of contract formation.

Exam Questions and Answers

Below, you will find answers to questions that are most commonly asked based on this case.

How would the principles established in Adams v Lindsell apply to digital communications, such as emails or instant messaging?

The principles from Adams v Lindsell are adapted to modern digital communications by recognizing that an acceptance sent via email or instant messaging becomes effective when the acceptance is sent (assuming this method of communication is reasonable under the circumstances). Courts generally treat emails similarly to postal communications in terms of acceptance timing, with the effective moment being when the email is sent, not when it is read.

How do legal theories address situations where a postal disruption affects the timely delivery of acceptance under the postal rule?

Legal theories consider postal disruptions under the principle of ‘excused performance’ due to unforeseen circumstances. If a postal disruption delays an acceptance which was timely dispatched, the acceptance would still be valid under the postal rule as long as it was sent within the appropriate timeframe. The disruption is viewed as an external factor outside the control of the contracting parties.

Considering the principles from this case, how would the acceptance be treated if the offeror explicitly states that acceptance is effective upon their receipt, not when sent?

If the offeror stipulates that acceptance is effective upon their receipt, not when sent, this modifies the traditional postal rule. In such cases, the acceptance must be received by the offeror to be effective, overriding the default rule set by Adams v Lindsell. This is a clear instance where parties can contract out of the default legal rules by mutual agreement to set different terms for their contract formation.

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