OFFER AND ACCEPTANCE

A simple contract (that is, a contract made not under seal) requires an offer made by one party and
accepted by the other, valuable consideration given by either side, and a common intention that the
agreement should be legally binding.

An offer is made when one party makes it clear, by words or actions, that he is prepared to be bound
as soon as the offer is accepted by the person to whom it is made. An offer is thus quite different
from an invitation to treat, though it is not always easy to distinguish the two.

Grainger v Gough [1896] AC 325, HL

AA were London agents for a French wine merchant X; they distributed catalogues and accepted
orders which they passed on to X, X reserving the right to refuse any order. The case turned on
whether X was liable for tax on contracts made by his agents in England. The House of Lords held
that the distribution of catalogues was an invitation to treat and that the offer was made by the
intending purchaser. This offer was transmitted by AA to X, and the contract was not made until X
accepted the offer in France.

Gibson v Manchester CC [1979] 1 All ER 972, HL

A local council write to tenants inviting them to apply to purchase their homes. One such tenant P
did apply, and a price was agreed. Following a change of party control, the new council DD refused
to go ahead with the sale. The House of Lords said there was no binding contract: P had made an
offer which DD had not yet accepted. Phrases in the correspondence such as "may be prepared to
sell" and "please complete the enclosed application form" were indicative of an invitation to treat.

A display of goods in a shop window, or on the shelves of a self-service shop, is generally regarded as
an invitation to treat rather than as an offer to sell.

Pharmaceutical Society v Boots [1953] 1 All ER 482, CA

Certain products that were to be sold only under the supervision of a registered pharmacist were
displayed on shelves in a self-service shop. The Pharmaceutical Society of Great Britain (who are
responsible for enforcing this legislation) brought a prosecution against the shop for allowing
customers to buy these products by helping themselves, but the Court of Appeal said they had no
case. The customer having selected the goods made an offer to purchase when he took them to the
cash desk, and there was a registered pharmacist supervising that point at which the sale took place.

Fisher v Bell [1960] 3 All ER 731, DC

It was a statutory offence under the Restriction of Offensive Weapons Act 1959 to offer for sale any
of various items, including flick-knives. A Bristol shopkeeper R displayed such a knife in his window,
with a ticket reading "Ejector knife - 4s." [4 shillings = 20p], and was prosecuted for an offence under
the Act. The Divisional Court took a literal interpretation of the statute and said he had committed
no offence: the display was an invitation to treat, not an offer to sell.

This analysis of the transaction leaves both parties free to change their minds. The shopkeeper can
refuse to sell to a customer whom he does not like (for example, one who is under age or drunk),
and the customer having taken goods from a supermarket shelf can return them if he changes his
mind before going to the till.

An advertisement is usually an invitation to treat but can be an offer, depending on its wording and
on the circumstances.
Partridge v Crittenden [1968] 2 All ER 421, HC QBD

The appellant placed an advertisement in a magazine: "Bramblefinch cocks and hens, 25s. [25
shillings = £1.25] each". He was charged with offering for sale a wild bird, contrary to statute, but the
High Court said he must be acquitted. The advertisement was an invitation to treat, not an offer to
sell; with limited stock the advertiser could not reasonably intend to be bound to sell to all those
who might accept. (If the advertiser indicated that he was willing to sell only to the first person
accepting, there would be no such problem.)

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, CA

The makers DD of a health product published newspaper advertisements promising to pay £100 to
anyone who contracted flu after buying one of their smoke balls and using it as directed. The
advertisement also said DD had deposited £1000 in a named bank to show their sincerity in this
matter. P bought a smoke ball, used it as directed, and still caught flu; she sued for the £100
promised. The Court of Appeal said the advertisement in this case was an offer; the wording of the
advertisement clearly showed an intention to be bound to anyone accepting.

Thornton v Shoe Lane Parking [1971] 1 All ER 686, CA

P parked his car in DD's car park, paying his money and taking a ticket from the automatic machine
at the entrance. When P returned later to collect his car, there was an accident in which he was
seriously injured; his action for demages turned on the validity of an exclusion clause printed on the
ticket. Lord Denning MR said a motorist buying a ticket [or presumably any other goods] from a
machine is irretrievably committed when he puts the money in the machine, and that the contract
must be completed at that time. The car park owners made an offer when they held out the machine
as ready to receive money, and the motorist accepted the offer when he put the necessary coins in
the slot.

Wilkie v London Passenger Transport Board [1947] 1 All ER 258, CA

P was an employee of DD and was injured through the negligence of the driver when travelling on
one of DD's buses. He was travelling on a free pass subject to wide exclusions of liability, and so was
unable to claim. But Lord Greene MR said obiter that when a public bus plies for hire it is making an
offer accepted by the passenger on boarding. [This analysis has been doubted by some writers, and
it would certainly make it difficult (unless the offer is regarded as conditional) for the bus driver to
refuse to allow a drunk or abusive passenger to board.]

At an auction sale, s.57(2) of the Sale of Goods Act 1979 confirms the common law rule that a
prospective buyer makes an offer by bidding, which the auctioneer accepts when he drops his
hammer. Thus a buyer may withdraw his bid until the hammer falls, or an item may be withdrawn
from the sale even after bidding has begun. The special rules for auctions, however, mean that the
lot cannot legally be sold at the auction to anyone other than the highest bidder.

Barry v Davies (2000) Times 31/8/00, CA

A sale of machinery by auction was advertised as being "without reserve". Two machines were put
up, whose list price would have been £14000 each, but the only bid (of £200 each) was made by C.
The auctioneer D refused to accept the bid and withdrew the machines from sale. C sued, and the
judge's award of £27600 damages was affirmed on appeal. Although there had been no contract
between vendor and purchaser, there was a collateral contract between auctioneer and bidder.
The growth of internet shopping has led to further developments in this area of law. Where a
company advertises goods or services on its web site this is normally (depending on the wording
used) an invitation to treat, and the customer makes an offer by sending in an order. So far, so good.
If the company sets up an automatic e-mail reply system, this (again depending on its wording) may
amount to an acceptance of the offer, and this may have unfortunate consequences for the
company if there is any error (e.g. £100 as a misprint for £1000) in the published details.

Public authorities are required by law to invite tenders for many services, and some other bodies do
so even when not so required. The offer in such cases is clearly made by the tenderor and accepted
by the authority, but the situation is more complex than it might seem.

Harvela Investments v Royal Trust [1985] 2 All ER 966, HL

Two parties were invited to bid secretly for a block of shares, on the understanding that the shares
would be sold to whoever bid higher. PP bid $2 175 000, while the other party bid "$2 100 000, or
$10 000 more than any other cash bid, whichever is higher". The House of Lords said the referential
bid was ineffective and that PP's cash bid should have been accepted. The use of referential bids,
they said, defeated the whole purpose of confidential competitive tendering and was not to be
encouraged.

Blackpool & Fylde Aero Club v Blackpool BC [1990] 3 All ER 25, CA

PP and six other parties were invited to submit tenders for the concession to run pleasure flights
from Blackpool Airport. PP submitted a tender in due form, but this was not considered owing to a
clerical error. DD argued that PP had merely made an offer which they (for whatever reasons) had
not accepted, but the Court of Appeal said there was an implied collateral warranty. The Council had
selected the parties invited to tender and thus knew them all, and had set out in detail the
procedure to be followed; this implied that any invitee conforming with that procedure would be
entitled to have his tender properly considered.

Withdrawal

As a general rule, an offer can be withdrawn at any time before it has been accepted; any purported
acceptance after withdrawal is ineffective.

Routledge v Grant (1828) 130 ER 920, Best CJ

D offered to take a lease of P's premises, a definite answer to be given (by P) within six weeks. After
three weeks D withdrew his offer, and just within the six weeks P purported to accept it. The judge
said the acceptance was too late; if one party has six weeks to accept an offer, the other has six
weeks to put an end to it. One party cannot be bound without the other.

Mountford v Scott [1975] 1 All ER 198, CA

D offered to sell P his house for £10 000, and P paid him £1 for an option to purchase at that price,
exercisable within six months. Before the end of that time, and before the option was exercised, D
purported to withdraw his offer. P then exercised the option, and the Court of Appeal said he was
entitled to specific performance. The token payment was valuable consideration, however small,
and made the offer irrevocable until the option expired.

Withdrawal must normally be communicated to the offeree, and does not take effect until such
communication is received: the special rule for postal acceptances (below) does not apply to
withdrawals.
Byrne v Van Tienhoven (1880) LR 5 CPD 344, Lindley J

DD posted a letter on 1 October offering to sell PP a quantity of tinplate, then posted another letter
on 8 October withdrawing the offer. The first letter reached PP on 11 October and they accepted the
offer at once by telegram, following with a confirmatory letter four days later. The second letter
purporting to withdraw the offer arrived on 20 October, by which time the offer had been accepted
and it was too late for DD to withdraw.

Dickinson v Dodds (1876) LR 2 ChD 463, CA

D offered to sell P his house, leaving the offer open until Friday. On Thursday P decided to buy the
house, but then heard from another person that D had contracted to sell to a third party. On Friday
P accepted the offer, and subsequently sought specific performance. The Court of Appeal said the
news (conveyed by a reliable third party) that the house had been sold was sufficient notice of the
withdrawal of the offer for sale, and the purported acceptance was therefore ineffective.

Shuey v United States (1875) 92 US 73, Supreme Court (USA)

An advertisement was published in several newspapers advertising a reward to be paid for

information leading to the arrest of any of several named criminals. Six months later the President
issued a proclamation cancelling the reward, and this was published in a similar manner. Five
months after that, P (who was aware of the original advertisement but not that the reward had been
cancelled) identified one of the wanted men and claimed the reward. The Supreme Court said that
since the offer had been made by general advertisement rather than to him personally, he should
have realised that it might be withdrawn in the same way.

Financings Ltd v Stimson [1962] 3 All ER 386, CA

D decided to buy a car on hire purchase and signed a form supplied by the dealer which declared
that the HP agreement became binding only when signed by the finance company PP. D paid a first
instalment and took the car away, but returned it two days later saying he had changed his mind.
The court said this was an effective withdrawal, and that PP's purported acceptance five days after
the car was returned was too late. (In fact, the car was stolen from the dealer's forecourt during the
five days and was recovered in a damaged state; PP were thus unable to fulfil their part of the
bargain to supply the car as originally seen, giving another reason for their purported acceptance to
be ineffective.)

Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Exch 109, Exchequer

D made an offer in June to buy shares in PP's company, but heard nothing. PP made an allocation of
shares in November, and purported to accept D's offer, but D refused to go ahead. The court said
that although the offer had not been formally withdrawn, it would expire after "a reasonable time",
and given the fluctuating nature of the subject matter the time interval had gone beyond what was
reasonable.

Luxor (Eastbourne) v Cooper [1941] 1 All ER 33, HL

Vendors AA promised an estate agent R £10 000 as a fee for selling a cinema; R found a buyer and a
sale was agreed "subject to contract", but AA then decided not to complete the deal and disposed of
the cinemas elsewhere. R sued for his commission but lost: the House of Lords found for AA on the
basis that there was no reason to infer an undertaking by not to revoke their offer. R was being
offered a substantial sum for comparatively little effort, and should therefore have realised that AA
might wish to withdraw.
Where an offer is to be accepted by conduct, then it is not clear what rules govern its withdrawal.
This is particularly important to rewards and "challenges" (e.g. £10 000 to the first person to swim
the Atlantic): although such offers can certainly be withdrawn - that is only reasonable - it is unfair if
the offeror can withdraw his offer moments before the other party "accepts" by completing the task.

Errington v Errington & Woods [1952] 1 All ER 149, CA

A father bought a house for his son and daughter-in-law DD to live in, paying £250 in cash and
borrowing the other £500 from a building society. The house was put into the father's name, but he
said that as long as DD paid the instalments he would transfer it to them as soon as the mortgage
was discharged. After some fifteen years the father died, and his widow P sued for possession of the
house. The Court of Appeal said there was a unilateral contract: DD were not bound to go on paying,
but if they did so that father was bound to transfer the house to them in accordance with his
promise. Denning LJ said (perhaps obiter) that a unilateral contract cannot be revoked once the
potential acceptor has embarked upon performance.

Daulia v Four Millbank Nominees [1978] 2 All ER 557, CA

PP sought to buy various properties from DD, and draft contracts were prepared. DD undertook that
if PP produced the draft contract and a bankers' draft by a certain time they would enter into a full
contract. PP obtained the bankers' draft and attended at DD's offices before the deadline, but DD
refused to go ahead. PP's claim for damages was dismissed by Brightman J and the Court of Appeal
because the collateral contract (relating to an interest in land) did not conform with the Law of
Property Act 1925 s.40, but Goff LJ said obiter that while the offeror of a unilateral contract is
entitled to require full performance of his condition and short of that is not bound, there must be an
implied obligation on his part not to prevent the condition becoming satisfied, and that obligation
arises as soon as the offeree starts to perform. Until then the offeror can revoke the whole thing, but
once the offeree has embarked on performance it is too late for the offeror to revoke his offer.

Acceptance

No contract comes into existence until an offer is accepted and, in most cases, that acceptance is
communicated to the offeror.

Felthouse v Bindley (1863) 142 ER 1037, Exch Ch

P discussed the purchase of a horse from his nephew J, and prices were discussed. On 2 January P
wrote to J saying "If I hear no more about him, I consider the horse is mine at £30-15-0" [£30.75]. J
did not reply, no money was paid, and the horse remained in J's possession. J decided to sell the
horse to P and told an auctioneer D to withdraw it from a sale, but D forgot this instruction and sold
the horse elsewhere. P now sued D in conversion, claiming the horse was his property. The Court of
Common Pleas (whose judgment was affirmed on appeal) said there was no contract: P's letter was
an open offer that had not been accepted.

Although the offeror cannot stipulate that the offeree's silence is to be taken as a sign of his
acceptance of the offer, he can generally specify the method by which acceptance is to be
communicated.

Compagnie de Commerce v Parkinson Stove [1953] 2 Lloyds Rep 487, CA

AA negotiated to buy some steel from RR, and RR made an offer with a stipulation that acceptance
be notified only on a pre-printed form. AA accepted by letter and then sought to cancel their
acceptance. The Court of Appeal said there was no valid acceptance and hence no binding contract,
but added obiter that it might be possible to say in some cases that those in RR's position had
waived the condition as to the mode of acceptance, expressly or by their conduct.

Eliason v Henshaw (1819) 4 Wheaton 225, Supreme Court (USA)

D offered to buy a quantity of flour from P, and wrote asking for a reply "by return of wagon". P
replied by post to D's other address, which took considerably longer, by the time the letter arrived D
had already bought from other sources all the flour he needed. D refused to accept the purported
contract as binding, and the court supported his view. The court said that the actual mode of reply
was unimportant, and that any means might be used as long as the reply was received no later than
would be expected by the method specified, but a different address and a substantial delay were
enough to invalidate the acceptance.

Tinn v Hoffman (1873) 29 LT 271, Exch.Ch.

P wrote to D asking for a price on 800 tons of iron. D offered the iron at 69s [69 shillings, or
£3.45]per ton and asked for a reply "by return". It was conceded that since the offer was not in fact
accepted by return of post there was no contract, but Honeyman J said obiter that a telegram or
verbal message or any other means at least as fast as a letter written by return of post would have
been sufficient.

Manchester Diocesan Council v Commercial & General Investments [1969] 3 All ER 1593, Buckley J

PP were the owners of property to be sold by tender; the tender form included a statement that the
successful tenderer would be notified by a letter sent by post to the address given in the tender
document. DD submitted a tender which PP decided to accept, and in September they notified DD's
surveyor of this acceptance subject to the formal approval of the Secretary of State. That approval
was given in November, and in January PP wrote to DD at the given address to confirm the
agreement. The question arose as to when a contract had been concluded, and the judge said it was
in September: the means of acceptance specified in the tender document was not stated to be the
only means of acceptance, and so (although the postal rule below would not apply) any other means
by which PP's acceptance was actually communicated would be sufficient.

Brogden v Metropolitan Railway (1877) LR 2 AC 666, HL

A regularly supplied RR with coal, and suggested after some years that they should enter into a
formal contract. A contract was drafted by RR and sent to A, who returned it with comments, but it
was never formally executed. However, A supplied coal and RR paid for it for some time thereafter
as if the draft contract had come into force. The House of Lords said that mere mental assent to the
contract would not have been enough, but the fact that both parties acted upon it was enough to
show acceptance of its terms as from the completion of the first delivery (or possibly, from the
placing of the first order after the return of the draft).

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, CA

The makers DD of a health product published newspaper advertisements promising to pay £100 to
anyone who contracted flu after buying one of their smoke balls and using it as directed. The
advertisement also said DD had deposited £1000 in a named bank to show their sincerity in this
matter. P bought a smoke ball, used it as directed, and still caught flu; she sued for the £100
promised. The Court of Appeal said P had accepted DD's offer by buying the smoke ball and using it
in accordance with the instructions given. It was not even necessary for P to notify DD of her
acceptance, because the advertisement had made no mention of notification and had implied that
all the customer need do was to buy and use the smoke ball.

Bowerman v ABTA [1995] NLJ 1815, CA

PP booked a ski trip with a company that subsequently went out of business. ABTA reimbursed their
payments subject to a deduction of £10 insurance, and PP sued for that balance. The Court of Appeal
said the notice displayed in the company's office, describing the ABTA protection scheme, was
sufficient to create a binding contract when PP accepted its unilateral offer by booking with an ABTA
member. The words "... ABTA arranges for you to be reimbursed ..." would be understood by the
ordinary reader as clearly promising a legally enforceable agreement, no matter what might have
been ABTA's private intention. [The reasoning adopted in this case would probably make a
manufacturer's guarantee legally enforceable, even though the buyer's contract is with the retailer.]

Confetti Records v Warner Music (2003) Times 12/6/03, Lewison J

CC owned the copyright in a particular piece of music, but agreed "subject to contract" that it might
be included on an album to be produced by DD. CC sent DD the track with an invoice, DD began to
process the track, and CC then changed their minds and e-mailed DD purporting to withdraw their
consent. The judge said that in the light of the earlier agreement, CC by sending the track and
invoice had made an offer which DD had accepted by conduct; the contract was complete at that
point and the purported withdrawal came too late.

Acceptance by conduct can raise questions as to the acceptor's motives, since a person cannot be
said to have accepted an offer of which he was not aware.

Williams v Cawardine (1833) 172 ER 1101, KB

D offered a reward to anyone giving information leading to the arrest of a murderer M. P was
severely beaten by M, and subsequently gave information that led to M's arrest and conviction of
the murder. The jury found as a fact that she had been motivated by revenge and public duty, and
not by the thought of the reward, but the court said she was entitled to the reward nevertheless.
She was aware of the offer, which had been widely advertised, and her actual motive was
immaterial. If the person knows of the reward and does the thing, said Littledale J, that is quite
enough. It does not say, "whoever will come forward in consequence of this notice ...".

R v Clarke (1927) 40 CLR 227, High Court (Australia)

The Government of Western Australia offered a reward (and a pardon, where appropriate) to
anyone giving information leading to the arrest and conviction of certain murderers. C, an
accomplice, saw the advertisement and subsequently gave evidence leading to the conviction of the
others. He admitted that his only motive was to clear himself of a charge of murder and that he had
no thought of claiming the reward at the time. The High Court reversed a decision of the Full Court
of Western Australia allowing his subsequent claim against the Crown, distinguishing Williams v
Cawardine on the basis that Mrs Williams had at least had the offer in mind, even if it was not her
primary motive. There cannot be assent without knowledge of an offer, said Higgins J, and ignorance
is the same thing whether it comes from never having heard of the offer or having forgotten about
it. Isaacs ACJ said there were many instances in which an act done with reference to an offer would
be acceptance of the offer by performance, but the same act done with reference to a different
object would not. An offer of £100 to the first person to swim 100 yards in the harbour on New
Year's Day would not be satisfied by a person who fell overboard and swam the distance merely to
save his life.
Counter-offers

A counter-offer is not an acceptance, and actually kills the original offer. The majority of the court
in Tinn v Hoffman above thought this would be true even where the counter-offer contains exactly
the same terms as the original offer, though a minority dictum of Honeyman J suggests the contrary.

Hyde v Wrench (1840) 49 ER 132, Lord Langdale MR

D wrote to P offering to sell his farm for £1000. P immediately responded with an offer of £950,
which D took time to consider. After a fortnight, D said he was not prepared to accept the lower
offer, whereupon P purported to accept D's original offer and brought an action for specific
performance. In the Rolls Court, the judge said there was no contract: by making his own offer P
impliedly rejected the offer made by D and could not subsequently revive and accept it.

Stevenson v McLean (1880) LR 5 QBD 346, Lush J

D wrote to P offering a quantity of iron at 40s [40 shillings] a ton, net cash. P telegraphed back asking
whether D would accept 40s. for delivery over two months, or if not, what time they would give.
Four hours later, having had no reply, P telegraphed accepting the original offer, to find D had
already sold the iron elsewhere. P sued for breach of contract, and the judge said there was no
counter-offer, merely an enquiry that should have been answered.

Butler Machine Tool v Ex-Cell-O [1979] 1 All ER 965, CA

PP offered to sell a machine to DD on certain fixed terms including a price variation clause, which
were said to prevail over any other terms in the buyers' order. DD replied by placing an order on
their standard order form, in which some of the terms were significantly different and there was no
price variation clause. The order form incorporated a tear-off slip which read "We accept your order
on the terms and conditions stated thereon", and this was signed and returned by PP. The Court of
Appeal said DD's order on different terms constituted a counter-offer, which was accepted by PP
when they returned the tear-off slip without further amendment. When there is a "battle of forms",
said Lord Denning MR, it will be found in most cases that the contract is complete as soon as the last
form is sent and received without objection being taken to it.

Acceptance is normally effective and the contract complete when it is received by the offeror, but
special rules have been devised to cover acceptance by post. Because of the time a letter spends in
the postal system, there must inevitably be a period of uncertainty for one party or the other, and
since the offeror can always protect himself by stipulating a different mode of acceptance the rule of
default is one that protects the acceptor.

Adams v Lindsell (1818) 106 ER 250, Lord Ellenborough

D wrote to P offering to sell some wool, and asked for a reply "in course of post". This offer was
delayed two days in the post, and consequently P's acceptance was late in coming back. On the day
before it arrived (but after it had been expected), D sold the wool elsewhere. The court said P was
entitled to damages: his acceptance was complete when his letter was posted, before the wool was
sold to the third party.

This "postal rule" applies only to acceptances, not to withdrawals or other communications, but
applies even if the letter is lost or delayed in the post unless the loss or delay is caused by the
acceptor's error. It is a special principle limited to letters sent by ordinary post, however, and is
restricted to situations in which the parties would reasonably have expected acceptance to be
signified in that way.
Entores v Miles Far East [1955] 2 All ER 493, CA

PP in London sent an offer by Telex to DD in Amsterdam, and the offer was accepted by Telex. For
technical reasons it became important to know where the contract had been made. The Court of
Appeal said it had been made in London: the postal rule applies only to ordinary letters. The sender
of a Telex message knows almost immediately whether or not it has been received, so there is no
period of uncertainty requiring a special rule. [By analogy, it would seem that the same should apply
to fax messages, but the status of telephone answering machines has yet to be
determined. Entores suggests that acceptance should take place only on receipt of the message, but
it seems wrong that the acceptor should bear the risk of a faulty receiving machine or negligence on
the offeror's part. Can it be, as some writers suggest, that a telephone answering machine is to be
regarded as the subscriber's agent for the receipt of messages?]

Tenax Steamship v The Brimnes (The Brimnes) [1974] 3 All ER 88, CA

An offeror sent by Telex a notice of withdrawal; it was sent at around 5.45 one afternoon but not
read until the next day even though the receiving office had been staffed until 6.30. The Court of
Appeal agreed on the facts that the withdrawal was effective from its arrival, but differed as to the
legal rule to be applied. Megaw LJ said that if a notice arrives at the address of the person to be
notified, at such a time and by such a means that it would in the normal course of business come to
his attention on its arrival, he cannot rely on his own or his servants' failure to act in a businesslike
manner to postpone the effective time of the notice. Cairns LJ, however, felt that the sender should
not rely on the recipients' reading every communication at once, and that in some circumstances a
notice arriving late in the working day might quite legitimately not be "received" until the following
morning.

Brinkibon v Stahag Stahl [1982] 1 All ER 293, HL

AA in London sent a telex to RR in Vienna accepting RR's offer and terms of sale, and subsequently
had occasion to sue for breach of contract. The Court of Appeal said the claim must be set aside
because the contract had been made outside the jurisdiction (i.e. in Vienna), and the House of Lords
agreed. Lord Wilberforce said there was no general rule that could cover all the possible situations
that might arise with the use of Telex machines: each case must be resolved by reference to the
intention of the parties, to sound business practice, and in some cases to a judgment as to where the
risks should lie.

Holwell Securities v Hughes [1974] 1 All ER 161, CA

D gave PP an option to purchase certain property, exercisable by notice in writing to D within six
months. Within the required time, PP wrote to D exercising their option but their letter, although
properly addressed, never arrived. Templeman J dismissed PP's claim for specific performance or
damages, and the Court of Appeal agreed. The wording of the offer was enough to make it clear that
acceptance without actual notification would not be enough.

The growth of electronic communication has raised new (and as yet unanswered) questions about
the applicability of the postal rule to communications by e-mail and via the world-wide web. On the
one hand, there are those who argue that e-mail is virtually simultaneous and that the postal rule
should not apply, but this takes no account of the fact that e-mail messages are sometimes rejected
by the server and that the recipient may not read the message immediately it arrives. The majority
of academic commentators have therefore tended to the view that e-mail should be treated as a
form of mail to which the postal rule should normally apply (subject to its exclusion by the parties'
clear intention).

Where the offeror sets up a web site that includes a reply form, this comes closer to instantaneous
communication because the offeree can tell at once whether his acceptance has been received.
There is a substantial body of opinion to the effect that the postal rule should not apply here (and a
quite sustainable view that a web page, like a shop window, normally constitutes an invitation to
treat rather than an offer). But given the speed at which electronic communication is still
developing, there are strong policy reasons for ensuring that the rules for electronic acceptance are
the same no matter which particular form of software is being used.