Critical Analysis: Critical Analysis Of The Postal Rule

Critical Analysis Of The Postal Rule
The postal rule is applicable where the parties decide to communicate using the post. It states that a contract is binding as soon as the acceptor puts his acceptance into transmission. It should not remain within the confines of the acceptor. If the post is treated as an agent, then as soon as the acceptance is delivered to the post office, the contract is complete. According to section 4 of the Indian Contracts Act, 'The communication of an acceptance is complete, as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer.' The offeror will be bound as soon as the acceptance

The facts of the case are that on September 2, 1817 the defendants sent a letter to the plaintiffs offering to sell a particular quantity of wool. It was specified in the letter that the acceptance should be conveyed using post. The letter was received by the plaintiffs on 5th of September. They sent their acceptance to buy the wool on that evening. It reached the defendants on September 9. The defendants had waited till September 8 for the acceptance but not having received it, sold the wool to some third party on that day itself. The plaintiffs filed a suit against them for breaching the contract.
The court held that if the defendants were not bound by the offer till the acceptance by the plaintiffs reached them, then even the plaintiffs should not bound by their acceptance till the defendant conveyed that they had received the acceptance and agreed to it. This would go on endlessly and no contract would ever be

Whereas in the Indian Law, once the acceptor posts his acceptance, he is bound only when it reaches the offeror. If he wants to revoke the acceptance, he can do so by using a speedier mode of communication. His wish to revoke the acceptance should reach the offeror before his acceptance reaches him.
The postal rule does not extend to instantaneous communication. This was held in the case Entores Ltd v Miles Far East Corporation. Denning LJ observed that :
Suppose a man shouts an offer to another man who is at the other end of a river. While the man is replying, an aircraft flies overhead. In that case there is no contract. Contract will come into existence only when the aircraft goes so that the man can shout his acceptance again and make himself be heard by the