Adams v Lindsell (1818)
Case: Adams v Lindsell (1818)
Jurisdiction:
English Common Law
Citation:
(1818) 1 B & Ald 681
Background:
The case arose from a contract formation dispute between Adams and Lindsell involving the sale of wool.
Lindsell wrote to Adams offering to sell wool and requested that Adams reply by post.
Due to a delay in the postal service, Adams’ acceptance letter was sent back late.
Lindsell, thinking Adams had rejected the offer, sold the wool to someone else.
Adams claimed there was a valid contract since he had posted the acceptance within the time stipulated.
Legal Issues:
When is an acceptance of an offer considered effective when communicated via post?
Whether the contract was formed when Adams posted the acceptance or when Lindsell received it?
What is the legal rule for acceptance via postal communication?
Judgment Summary:
The court held that the acceptance is complete the moment it is posted, not when it is received by the offeror.
This established the “postal rule” in contract law, which means that:
Once the offeree posts the acceptance letter, a binding contract is formed.
The risk of delay or loss in the post is borne by the offeror.
Therefore, even though Lindsell did not receive the acceptance letter on time, the contract was valid from the moment Adams posted the letter.
Key Legal Principles:
1. Postal Rule (Mailbox Rule):
Acceptance communicated via post is effective upon posting, not upon receipt.
This rule creates certainty in contract formation when parties use postal communication.
It protects the offeree from the risk of postal delay or loss.
2. Offeror’s Risk:
The offeror, by choosing the post as the mode of communication, implicitly accepts the risk of delay or loss in the mail.
The offeror cannot revoke the offer once the offeree has posted the acceptance.
3. Exceptions:
The postal rule applies only when it is reasonable and customary to use the post.
It does not apply to instantaneous communication methods like telephone or email (modern development).
Related Case Law:
Entores Ltd v Miles Far East Corporation (1955) 2 QB 327
Distinguished postal rule and held that acceptance via instantaneous communication (e.g., telex) is effective upon receipt.
Household Fire Insurance Co. v Grant (1879) 4 Ex D 216
Confirmed the postal rule that acceptance is effective upon posting, even if the letter is lost.
Byrne v Van Tienhoven (1880) 5 CPD 344
Held that revocation of an offer is effective only when received by the offeree, not when posted.
Significance of the Case:
Adams v Lindsell is the foundational case for the postal rule of acceptance.
It balances the practical difficulties of communication delays before the era of instantaneous communication.
The case is frequently taught as a fundamental principle in contract law regarding offer and acceptance.
It emphasizes the importance of communication timing in contract formation.
Summary Table:
| Aspect | Details |
|---|---|
| Issue | When is acceptance effective via postal communication? |
| Held | Acceptance is effective upon posting the acceptance letter. |
| Principle | Postal rule (mailbox rule) |
| Risk Allocation | Risk of postal delay/loss lies with offeror |
| Impact | Established certainty in contract formation via post |
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