postal acceptance rule


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postal acceptance rule

an offer is accepted when the acceptance is posted. This means that a binding contract is formed and, accordingly, the person who made the offer cannot sell to another without being liable in damages for breach of contract. The acceptor is bound but may be able to withdraw his acceptance if he can communicate this before the acceptance reaches the person who made the offer. It has been held in England that an acceptance that never actually came out of the other end of the postal system was effective. This extreme position has been questioned in Scotland. There are some decisions against the rule in the USA. Its rationale depends on the nature of the post and its willing use by the parties - different considerations may apply where instantaneous communications are employed such as email, telex or fax.
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