A full specimen essay

Having identified and worked through the steps needed for interpreting, researching, planning, writing and editing a good law essay, it is now worth considering a finished product.

‘When a contract is made by post it is clear law… that the acceptance is complete as soon as the letter is put into the post box, and that is the place where the contract is made. But there is no clear rule about contracts made by telephone or by Telex. Communications by [electronic] means are virtually instantaneous and stand on a different footing.’ (Denning LJ in Entores v Miles Far Eastern Shipping Co (1955)).

Critically discuss.

The ‘general rule [is that] a binding contract is made at the place where the offeror receives notification of the acceptance’.¹ The postal acceptance rule, which was first established in Adams v Lindsell,² is an exception to this rule. In practical terms the decision in Adams establishes that where communication of acceptance is made by post, the contract is formed at the post box in which the offeree posts the acceptance.

In the nineteenth century dealings between parties at a distance were inevitably subject to delays. The mid-twentieth century technology of telex machines discussed in Entores³ reduced those delays. Today, delays are further reduced as mobile devices enable simultaneous connections between people across the globe. New technologies have not, however, entirely eliminated the delays caused by distance and this is particularly true of email communication.

This essay will focus on the central questions that emerge from Denning LJ’s words. First, are virtually instantaneous communications essentially different from postal communications? Secondly, if they are essentially different from postal communications, is there any reason that the general rule should not apply? It will begin by considering the general rule, that acceptance must be communicated, and the reasons for the (exceptional) postal acceptance rule. It will then examine the similarities and differences between postal and virtually instantaneous communications. This will show that virtually instantaneous communications bear some resemblances to postal communications as well as sharing some of the characteristics of face-to face communications. It will conclude by suggesting that as new methods of communication emerge ‘the problems posed by them must be resolved by reference to the intention of the parties, sound business practice and in some cases a judgment where the risk shall lie’.⁴

Blair J recently repeated the firmly embedded general rule ‘that the acceptance of an offer is not effective until communicated to the offeror’.⁵ The concepts of offer and acceptance are based on the classic model of a contract formed through face-to-face communications. This is illustrated by Denning LJ in Entores;

[C]onsider a case where two people make a contract by word of mouth in the presence of one another. Suppose, for instance, that I shout an offer to a man across a river or a courtyard but I do not hear his reply because it is drowned by an aircraft fl ying overhead. There is no contract at that moment. If he wishes to make a contract, he must wait till the aircraft is gone and then shout back his acceptance so that I can hear what he says.⁶

In face-to-face dealings the three elements of communication of acceptance; dispatch; receipt and notification usually combine in a single event.⁷ As soon as the man in Denning LJ’s example shouts ‘Agreed’ he dispatches his acceptance and, aircraft noise permitting, upon hearing this the offeror both receives and is notified of the acceptance and the contract is made.

The postal acceptance rule is a ‘radical exception to a fundamental principle of contract law.’¹³ It might be expected that such a departure from the usual rule would be supported by convincing reasoning but it is not. As Macdonald notes, ‘A number of justifications for the postal rule have been put forward in the past which have long been recognised to be fatally fl awed and dismissed accordingly’.¹⁴ These include the justification in Adams v Lindsell, based on the ‘meeting of minds’¹⁵ and the idea that the Post Office acted as agent for one or both of the parties.¹⁶ Likewise the notions that the rule was based on business convenience or the ‘fiction of continuing assent’¹⁷ or that it was a ‘better rule evidentially’¹⁸ have failed to find favour with academic commentators. What rationale remains? An exploration of the issue of revocation provides some insights.

Until an offer is accepted the offeror is free to revoke the offer, but what is the position where the offeree posts an acceptance and soon afterwards, but before receiving the acceptance, the offeror revokes the offer? Such were the facts in Henthorn v Fraser,¹⁹ where the Court of Appeal decided that once the acceptance was posted the contract was made and the offer could not be revoked.

English law is clear that the postal rule does not apply to email,²³ but no English cases have considered the application of the postal rule to newer ‘virtually instantaneous’ or instantaneous technologies. As the application of the postal rule has become increasingly restrictive²⁴ it is not enough to show that emerging technologies share common features with postal communications. Any expansion of the postal rule requires a strong justification as to why the general rule should not apply.

Turning first to email, it is generally agreed that although email appears to be instantaneous it is technically not instantaneous and indeed, in practice it is frequently delayed.²⁵ Mik pursues the idea that email communication is operationally similar to the post. She writes, ‘email is an asynchronous, non-real-time, delayed-access, store-and-forward method of communication’.²⁶ Once an email is created, provided the device is online, the action of clicking the ‘send’ button will dispatch the message to the out-going mail server and transmit it on an unpredictable journey within a global network of computers until it reaches the Internet Service Provider of the intended recipient. The email can then be downloaded by the receiving device and accessed by the recipient.²⁷ These steps are, according to Mik, analogous to the posting of a letter.

The requirement for a notification of receipt could solve the issue of email unreliability but, as Mik notes, such notifications are precisely what the postal acceptance rule was created to avoid!

Al Ibrahim et al. identify the similarities between the post and email communications in much the same way as Mik does, but conclude that the postal acceptance rule should be extended to emails for two reasons. First, ‘the absence of any legislative establishment regarding determining the conclusion of email acceptances’²⁹ and secondly because applying the postal rule would ‘avoid any business uncertainty regarding the timing of email contracts’.³⁰ The absence of a rule may call for the introduction of some rule but ideally one relating specifically to emails. The question of timing was addressed in Thomas v BPE Solicitors where the court considered ‘whether an email acceptance is effective when it arrives, or at the time when the offeror could reasonably be expected to have read it’.³¹ Blair J concluded that, in the context of the particular negotiations, 6 pm on a Friday evening ‘was within working hours’³² and therefore, that it was realistic to assume that the email would be read. In a world where many companies operate around the clock in different time zones and jurisdictions the idea of ‘working hours’ is unlikely to create business certainty and the courts will no doubt revisit this question.³³ In the meantime it seems that email will be subject to the general rule that communication requires notification and that the precise timing of notification will turn on the facts of the case.

What about other ‘virtually instantaneous’ communications? Telephone conversations have been treated on a par with face-to-face communications for more than half a century,³⁴ but as Coote³⁵ notes, it is not the method of transmission that should be decisive but the actual communication process that the parties engage in. Instant messengers and Apps create numerous possibilities for electronic communications at a distance to mimic face-to-face communications. Many instant messengers indicate when people are online, when they are typing and immediately identify when a message has not been delivered. Mik is surely correct in saying that acceptance in such cases should follow the general rule and be effective on receipt.³⁶

In conclusion, the words of Denning LJ are instructive. When he spoke of ‘virtually instantaneous’ communications in 1955 he could not have imagined the ‘virtual’ worlds that twenty-first century ‘netizens’ now inhabit. The Court of Appeal in Entores decided that the general rule should apply to virtually instantaneous communications. This was affirmed in the later telex case of Brinkibon Ltd v Stahag Stahl,³⁷ where Lord Wilberforce stated that ‘No universal rule can cover all such cases: they must be resolved by reference to the intentions of the parties, by sound business practice and in some cases by a judgment where the risks should lie.’³⁸ There is much to be said for this approach. The postal acceptance rule placed the risk on the offeror on the basis that the offeree had done all that they could by putting their acceptance in the post. Two hundred years ago, when dealings at a distance were inevitably delayed, the postal rule provided a solution – albeit an exceptional one – and fixed communication of acceptance by post as the point of dispatch rather than notification. Although email communications bear some resemblance to postal communications they are, in most cases, ‘virtually instantaneous’ and certainly quite unlike the post in terms of unavoidable delays. More importantly, it cannot be said that an offeree who sends an email acceptance has done all that they can to make certain that their acceptance is received. Unlike a misaddressed letter, a misaddressed email will ‘bounce back’ to the sender and delays in email delivery can be quickly identified and followed up. In relation to email and other virtually instantaneous communications ‘the postal acceptance rule is a dead horse’³⁹ and, as Denning LJ concluded in Entores, the general rule should apply.⁴⁰

1 Carlill v Carbolic Smoke Ball Co [1893] 1 KB 256 (CA) 262

2 (1818) 1 B & Ald 681, (1818) 106 ER 250 (KB)

3 [1955] 2 QB 327 (CA)

4 Brinkibon Ltd v Stahag Stahl [1983] 2 AC 34 (HL) 50 (Lord Brandon)

5 Thomas v BPE Solicitors [2010] EWHC 306 (Ch) [86]

6 Entores v Miles Far Eastern Shipping Co [1955] 2 QB 327 (CA) 332

7 Eliza Mik, ‘The Effectiveness of Acceptances Communicated by Electronic Means, or – Does the Postal Acceptance Rule Apply to Email’ (2009) JCL 26(1), 68

8 ibid 69

9 (1878–79) LR 4 Ex D 216 (CA)

10 L J Korbetis v Transgrain Shipping BV [2005] EWHC 1345 (QB) [15]

11 Holwell Securities Ltd v Hughes [1974] 1 WLR 155

12 ibid

13 Simone Hill, ‘Flogging a Dead Horse – The postal acceptance rule and e-mail’ (2001) 17 JCL 151, 153

14 Elizabeth Macdonald, ‘Dispatching the dispatch rule? The postal rule, e-mail, revocation and implied terms’ (2013) 19(2) Web JCLI accessed 23 November 2013

15 Simon Gardner, ‘Trashing with Trollope: A Deconstruction of the Postal Rules in Contract’ (1992) 12 Ox Jo LS 170, 171

16 Dunlop v Higgins (1848) 1 HLC 381, 9 ER 805, Wright v Bigg (1852) 15 Beav 592, 51 ER 668

17 Mik (n 7) 76

18 Macdonald (n 14) 3

19 [1892] 2 Ch 27

20 Mik (n 7) 77

21 Hill (n 14) 159

22 Gardner (n 15) 180

23 Thomas v BPE Solicitors [2010] EWHC 306 (Ch) [90]

24 Carmarthen Developments Ltd v Pennington (2008 CSOH 139), Wardle v Agricultural and Rural Finance Pty Ltd [2012] NSWCA 107

25 Marwan Al Ibrahim, Ala’eldin Ababneh and Hisham Tahat, ‘The Postal Acceptance Rule in the Digital Age’ Journal of International Commercial Law and Technology (2007) 2(1) 47, 49; Mik (n 7) 83

26 Mik (n 7) 83

27 Al Ibrahim, Ababneh and Tahat (n 25) 48–49

28 Mik (n 7) 88

29 Al Ibrahim, Ababneh and Tahat (n 25) 49

30 ibid 51

31 Thomas v BPE Solicitors [2010] EWHC 306 (Ch) [90]

32 ibid

33 By the time you read this book the courts may well have revisited this. You may like to exercise your research skills to find out the current position.

34 Entores (n 6) 332-333

35 B Coote, ‘The Instantaneous Transmission of Acceptances’ (1971) 4 NZULR 331 cited in Mik (n 7) 90

36 Mik (n 7) 96

37 Brinkibon (n 4)

38 ibid 42

39 Hill (n 13) 162

40 Entores (n 6)