• In the case of Henthorn v Fraser 1892 2 Ch 27, it was held that acceptance is complete as soon as a letter is posted where the parties had in consideration that postal services may be used to offer acceptance.  

Facts of the Case

  • In 1891, C wanted to purchase from the Huskisson Benefit Building Society certain houses in Flamank Street, Birkenhead.
  • In May at the office of the Society in Chapen Street, Liverpool, he signed a memorandum drawn up by the secretary. The offer was £600 for the property to which the offer was declined by directors.
  • On the 1st of July he made a similar offer of £700, which was also declined.
  • On 7th of July, he called again at the office and the secretary orally agreed to sell to him for £750.
  • The office was reduced to writing: “I hereby give you the refusal of the Flamank Street property at £750 for fourteen days”.
  • On the morning of the 8th, another person rang and offered £760 for the property which was accepted and a contract for purchase signed, subject to a condition for avoiding it if the society found that they could not withdraw from the offer to C.
  • The secretary posted a letter to C writing to cancel and withdraw their acceptance.
  • The letter did not arrive to the C till around 5pm but as he was put, he had only opened the letter at around 8pm.
  • In the meantime, a letter of acceptance was posted to the office by C’s solicitor.
  • The secretary the next morning replied stating the offer had been withdrawn.
  • C brought an action against the society which was dismissed.
  • C appealed.

Issues in Henthorn v Fraser 1892 2 Ch 27

  • Did the postal rule apply and therefore did the contract from as soon as C’s solicitor sent the letter of acceptance?

Held by Court of Appeal

  • Appeal in favour of Claimant.

Lord Herschell

  • Held that where the circumstances under which an offer is made are such that it must have been within the contemplation of the parties that according to the ordinary usages of mankind, the post might be used as a means of communication the acceptance of it, the acceptance is complete as soon as it is posted.
  • “An offer to sell is nothing until it is actually received. No doubt there is the seeming anomaly pointed out by Lord Bramwell that the same letter might contain an accept­ance, and also such a notice or offer as to other property, and that when posted it would be effectual as to the acceptance, and not as to the notice or offer. But the anomaly, if it be one, arises from the different nature of the two communications. As to the acceptance, if it was contemplated that it might be sent by post, the acceptor, in Lord Cottenham’s language, has done all that he was bound to do by posting the letter, but this cannot be said as to the notice of withdrawal. That was not a contem­ plated proceeding. The person withdrawing was bound to bring his change of purpose to the knowledge of the said party, and as this was not done in this case till after the letter of acceptance was posted, I am of opinion that it was too late. The point has been so decided in two cases: Byrne v. Van Tienhoven (1), and Stevenson v. McLean (2), and I agree with those decisions.” P.37