Adams v.

Lindsell
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Citation. 106 ER 250
Brief Fact Summary. The Defendants, wool dealers, sent a letter to Plaintiffs, wool
manufactures, offering to sell them fleeces, upon receipt of their acceptance in the course of
post.

Synopsis of Rule of Law. This is the landmark case from which the mailbox rule is derived.
The mailbox rule stands for the proposition that an offer is accepted upon mailing of the
offer.

Facts. Defendants mailed their offer to sell on the 2nd of September, 1817. . The Defendants
letter was misdirected and did not reach the plaintiffs until 7:00 p.m., Friday the 5th. That
night, Plaintiffs accepted Defendants offer, and mailed it directly back in a timely manner. It
was received by Defendant on the 9th, but they expected to receive it on the 7th and, in the
meanwhile, had offered and sold their wool to another person. Plaintiffs brought suit for the
losses they sustained by not receiving the fleeces.

Issue. This case considers when mutual assent to an agreement occurs in the particular
circumstance of a mail contract. Held. The Court of Kings Bench upheld the rule of the trial
court that, when forming contracts by mail, acceptance is valid from the time of mailing a
letter containing language of same.
Because Defendants, in their offer, notified the Plaintiffs of their terms, that they would await
acceptance in the course of post, they were bound by the terms of their offer until it was
accepted or until the terms of the offer had expired. Plaintiffs accepted within the course of
post, by mailing same, and therefore manifested a valid asset.

Discussion. It is important to remember that the mailbox rule is a default rule, meaning that
parties to a contract can opt out of using this rule by the terms of their agreement. When
offers are made via mail, acceptance is complete upon mailing. However, be careful to note
what the terms of the offer are.


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ACCEPTANCE:
Section 7 of Indian Contract Act:
In order to convert a proposal into a promise the acceptance must -
(1) be absolute and unqualified.
(2) be expressed in some usual and reasonable manner, unless the proposal prescribes the
manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be
accepted; and the acceptance is not made in such manner, the proposer may, within a
reasonable time after the acceptance is communicated to him, insist that his proposal shall be
accepted in the prescribed manner, and not otherwise; but; if he fails to do so, he accepts the
acceptance.
Butler Machine Tool Co. Ltd. vs. Ex-Cell-O
Corporation (England) Ltd.
January 6, 2013 by Vivek Kumar Verma in Contract Law, Offer and Acceptance.
CITATION(S): [1977] EWCA Civ 9, [1979] 1 WLR 401, 1979 UK 1 All ER 965
FACTS: The sellers of a machine (Butler Machine Tool Co. Ltd.) made an offer (on 23
rd

May) to the buyers (Ex-Cell-O Corporation) for selling a machine worth a fixed price, subject
to certain terms and conditions (T&C), amongst which two prominent ones were:
1. Those T&C shall prevail over any terms and conditions in the buyers order
2. There was a price variation clause which provided for an increase in the price of the
machine if there was an increase in costs and so forth.
The buyers in return made an order for the machine, subject to certain T&C including express
denial of any Price Variation provision (as different from T&C laid out in sellers quotation).
However, they signed the acknowledgement form stating, We accept your order on the
terms and conditions stated therein. The receipt of this order was duly acknowledged by
the sellers without any objection to any clause of its T&C but with words, in accordance
with our revised quotation of 23
rd
May. When the sellers came to deliver the machine they
claimed the increased price of the machine because of raised costs. However, buyers refused
to pay the increase in price. The sellers sued them for the breach of contract.
LOWER COURT: The contract was concluded on the sellers rather than the buyers terms
and conditions and was therefore the contract subject to price variation.
To this buyers appealed.
CONTENTIONS (SELLERS):
1. Apart from the T&C which were printed on back of the quotation, sellers also
contended that the acknowledgement slip of the buyers order was accompanied by
the letter which stated that the order was accepted in accordance with sellers revised
quotation of 23
rd
May, and, hence, the contract was on the sellers terms.
2. It was even contended by the sellers that the letter enclosed with the
acknowledgement receipt was in itself a counter offer which was accepted by the
buyers by taking the physical delivery of the goods and hence the contract was made
according to formers terms and conditions.
HELD:
1) As per Denning M.R., when there is a battle of the forms, then there is a contract as
soon as the last of the forms is sent and received without objection being taken to it (LAST
SHOT DOCTRINE). Here, the last shot was fired by the buyers by attaching T&C to their
order which were materially different from those of sellers. Since, that order was received
and acknowledged without any objection to any of the T&C attached therewith, hence,
buyers terms will prevail.
2) Further, according to him, the documents comprised in battle of forms were to be
considered as a whole. Therefore, the acknowledgement made by the sellers was a decisive
document which makes it clear that the contract was on the buyers terms and not on the
sellers terms.
3) Other judges though arrived at the same conclusion but followed the traditional pathway.
They observed that the buyers order was a counter offer which destroyed the offer made in
the sellers quotation. This was because the T&C mentioned in the order were poles apart
from the T&C mentioned in the quotation. The sellers by acknowledging the receipt of the
order, and, delivering the machine, accepted that offer. They, therefore, couldnt claim the
increase in price as the price variation clause of the original offer, made by them, stood
cancelled.
4) (As per Lawton L.J.) If the letter was taken to be a counter offer made by the sellers to
the buyers, then, there was never a consensus ad idem, and, hence, there was never a valid
offer, as the buyers had made it clear to the sellers, even before taking the delivery, that, they
were not accepting the price variation clause.
5) The court held that the letter enclosed with the acknowledgement slip, was in the
business sense, referring to the quotation as to the price and the identity of the machine and
not the small print conditions on the back of the quotation. Hence, it didnt incorporate
sellers terms back into the contract.
CONCLUSION: The court therefore allowed the appeal and case was decided in favour of
the buyers.
RATIO: A reply to an offer which purports to be an acceptance but which contains terms
materially different from those originally set out in offer, shall amount to counter offer, which
when duly acknowledged and accepted by the offeror shall amount to acceptance of the
counter offer, and, shall bind him with the terms set out in the counter offer.
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Union of India & Ors. v. M/S. Bhim Sen
Walaiti Ram
February 7, 2013 by Vivek Kumar Verma in Acceptance, Contract Law, Fundamentals.
Union of India & Ors. v. M/S. Bhim Sen Walaiti Ram
1970 SCR (2) 594
(Section 7 of Indian Contract Act -Acceptance must be absolute)
FACTS:
In an auction held for the sale of license of liquor shop, defendant offered the highest bid
which was provisionally accepted subject to the confirmation of Chief Commissioner who
may reject any bid without assigning any reasons. Since defendant failed to deposit the
required amount, Chief Commissioner rejected the bid. Holding the defendant liable for the
difference between the bid offered by him and the highest bid accepted in re-auction, plaintiff
started proceedings against him under the rule given in statute applying to person to whom
shop has been sold.
ISSUE: Whether the defendant is entitled to any relief u/s 7 of ICA?
HELD:
U/s 7(a) of Indian Contract Act (ICA), the acceptance must be absolute and unqualified,
leaving no ground for doubt or uncertainty. If the acceptance is conditional, no valid
contract is formed, and the offer can be withdrawn at any moment till the absolute
acceptance has taken place within reasonable time of such offer.
In present case, the contract for sale was not complete till the bid was confirmed by the
chief commissioner and till such confirmation; the bidder was entitled to withdraw the bid.
Since there was never any saleof the license of the liquor shop to the defendant, therefore, he
cannot be held liable.
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REVOCATION OF PROPOSALS AND ACCEPTANCE:
Section 5 of Indian Contract Act:
A proposal may be revoked at any time before the communication of its acceptance is
complete as against the proposer, but not afterwards.
An acceptance may be revoked at any time before the communication of the acceptance is
complete as against the acceptor, but no afterwards.

Payne v Cave
From Wikipedia, the free encyclopedia
Payne v Cave(1789) 3 TR 148 is an old English contract law case, which stands for the
proposition that an auctioneer's request for bids is not an offer but an invitation to treat. The
bidders make the offers which can be accepted by the auctioneer.
Contents
1 Facts
2 Judgment
3 Significance
4 See also
5 Notes
Facts
Mr Cave made the highest bid for Mr Payne's goods at an auction. But then, Mr Cave
changed his mind and he withdrew his bid before the auctioneer brought down his hammer.
It was held that the defendant was not bound to purchase the goods. His bid amounted to an
offer which he was entitled to withdraw at any time before the auctioneer signified
acceptance by knocking down the hammer. Note: The common law rule laid down in this
case has now been codified in many countries in variations of the Sale of Goods Act, e.g. UK
1979 s57(2).
Judgment
The court held that Mr Cave was entitled to withdraw his offer at any time before the
auctioneer accepted it. The auctioneer's request for bids was an invitation to treat, and each
bid constituted an offer which could be withdrawn at any time until it's accepted, and finally,
the fall of the auctioneer's hammer constituted acceptance of the highest bid.
Significance
Barry v Davies
[1]
qualified Payne by ruling that if the auction is advertised as being "without
a reserve price", then the auctioneer is bound to sell to the highest bona fide bidder (and not
the seller himself, as attempted in Warlow v Harrison). Also, the Sale of Goods Act 1979, s
57 states that if an auction is held without any reserve, then the auctioneer must accept the
highest bid (this was subsequently applied in Barry v Davies).
In opening a contract class at Harvard in the autumn of 1870, Professor Christopher
Columbus Langdell, instead of the traditional didactic approach of lecturing a hall of
students, pointed to a student and asked, Mr Fox, will you state the facts of Payne v Cave?,
then, Mr Rawle will you give the plaintiffs argument? He replied to answers, in Socratic
style, with could you suggest a reason?. This became known as the case method of legal
study, that is followed around most of the common law world today.
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Byrne v Van Tienhoven
From Wikipedia, the free encyclopedia
Byrne v Van Tienhoven

Court High Court Common Pleas Division
Full case name Byrne & Co v Leon Van Tienhoven & Co
Citation(s) [1880] 5 CPD 344
Court membership
Judge(s) sitting Lindley J
Keywords
revocation, postal rule
Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344 is a leading English contract
law case on the issue of revocation in relation to the postal rule. In it Lindley J of the High
Court Common Pleas Division ruled that an offer is only revoked by direct communication
with the offeree, and that the postal rule does not apply in revocation; while simply posting a
letter counts as a valid acceptance, it does not count as valid revocation.
Contents
1 Facts
2 Judgement
3 Significance
4 See also
5 Notes
6 External links
Facts
Van Tienhoven & Co posted a letter from their office in Cardiff to Byrne & Co in New York,
offering 1000 boxes of tinplates for sale on 1 October. Byrne and Co got the letter on 11
October. They telegraphed acceptance on the same day. But on 8 October Van Tienhoven had
sent another letter withdrawing their offer, because tinplate prices had just risen 25%. They
refused to go through with the sale.
[1]

Judgement
Lindley J held that the withdrawal of the offer was not effective until it was communicated.
His judgment stated the following.

There is no doubt an offer can be withdrawn before it is accepted, and it is immaterial
whether the offer is expressed to be open for acceptance for a given time or not. The offer
was posted on the 1st of October, the withdrawal was posted on the 8th, and did not reach
the plaintiff until after he had posted his letter of the 11th accepting the offer. It may be
taken as now settled that where an offer is made and accepted by letters sent through the
post, the contract is completed the moment the letter accepting the offer is posted: Harris's
Case; Dunlop v Higgins, even although it never reaches its destination. When, however,
those authorities are looked at, it will be seen that they are based upon the principle that
the writer of the offer has expressly or impliedly assented to treat an answer to him by a
letter duly posted as a sufficient acceptance and notification to himself, or, in other words,
he has made the post office his agent to receive the acceptance and notification of it. But
this principle appears to me to be inapplicable to the case of the withdrawal of an offer. In
this particular case I find no authority in fact given by the plaintiffs to the defendants to
notify a withdrawal of their offer by merely posting a letter, and there is no legal principle or
decision which compels me to hold, contrary to the fact, that the letter of the 8th of October
is to be treated as communicated to the plaintiff on that day or on any day before the 20th,
when the letter reached him...
...Before leaving this part of the case it may be as well to point out the extreme
injustice and inconvenience which any other conclusion would produce. If the
defendants contention were to prevail no person who had received an offer by post
and had accepted it would know his position until he had waited such a time as to be
quite sure that a letter withdrawing the offer had not been posted before his
acceptance of it.

Significance
Revocation of an offer must be received and understood by the offeree before it comes into
effect. An acceptance by the offeree before they receive notice of the revocation will be
considered valid.
[

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Henthorn v Fraser
From Wikipedia, the free encyclopedia
Henthorn v Fraser [1892] 2 Ch 27 is a decision of the Court of Appeal of England and
Wales dealing with the postal rule in English law of contract formation.
Contents
1 Facts
2 Judgement
3 Significance
4 See also
Facts
The claimant received a note from the defendant with an offer to purchase a certain property
within 14 days. The claimant responded to the offer with an acceptance posted the next day
via mail. The defendant withdrew the offer before receiving the acceptance, but after the
acceptance was posted.
Judgement
The Court of Appeal ordered that the claimant was entitled to specific performance. Lord
Herschell argued: "Where the circumstances are such that it must have been within the
contemplation of the parties that, according to ordinary usage of mankind, the post must be
used as a means of communicating the acceptance of an offer, the acceptance is complete as
soon as it is posted."
Significance
The case is based on a line of decision starting with Adams v Lindsell (1818), according to
which the acceptance was valid at the time of posting. The importance of this decision's ratio
is that a postal acceptance will only be valid at the time of posting if it is reasonable for the
offeror to expect an acceptance by post. It follows that if an offer is brought by hand to a
neighbour or sent by fax or telegram, the offeror expects an acceptance by comparable
means.
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Adams v Lindsell
From Wikipedia, the free encyclopedia
(Redirected from Adams v. Lindsell)
Adams v Lindsell

Court King's Bench
Full case name Adams & Ors v Lindsell & Ors
Decided 5 June 1818
Citation(s)
[1818] EWHC KB J59; (1818) 1 B & Ald
681; 106 ER 250
Case opinions
Law J
Court membership
Judge(s) sitting Law J
Keywords
Offer and acceptance, postal rule
Adams v Lindsell [1818] EWHC KB J59, is an English contract case regarded as the first
case towards the establishment of the "postal rule" for acceptance of an offer. Ordinarily, any
form of acceptance must be communicated expressly to an offeror; however, it was found
that where a letter of acceptance is posted, an offer is accepted "in course of post".
Contents
1 Facts
2 Judgment
3 Significance
4 See also
5 Notes
6 References
Facts
The case involved two parties in the sale of wool. On 2 September, the defendants wrote to
the plaintiffs offering to sell them certain fleeces of wool and requiring an answer in the
course of post. The defendants misdirected the letter so that the plaintiffs did not receive it
until 5 September.
[1]
The plaintiffs posted their acceptance on the same day but it was not
received until 9 September. Meanwhile, on 8 September, the defendants, not having received
an answer by 7 September as they had expected, sold the wool to someone else.
The defendants argued that there could not be a binding contract until the answer was
actually received, and until then they were free to sell the wool to another buyer.
[1]

Judgment
Law J said that if that was true it would be impossible to complete any contract through the
post; if the defendants were not bound by their offer until the answer was received, then the
plaintiffs would not be bound until they had received word that the defendants had received
their acceptance, and this could go on indefinitely.
[1]
Instead it must be considered that the
offerors were making the offer to the plaintiffs during every moment that the letter was in the
post. Then when the Offeree has placed his acceptance in the post there is a fictional meeting
of minds, which concludes the offer and gives effect to the acceptance.
[2]

The acceptance did not arrive in course of post strictly speaking (all parties understood in
course of post to refer to 7 September). But because the delay was the default of the
defendant it was taken that the acceptance did arrive in course of post.
Significance
This case in the first step towards establishing the postal acceptance rule (mailbox rule). It
was not until 1892 in Henthorn v Fraser [1892] 2 Ch 27 that the court determined the precise
timing of the acceptance, that is the moment the letter of acceptance is posted. (See also
Entores Ltd v Miles Far East Corporation [1955] 2 QB 327).
--------------------------------------------------------------------------------------
Dickinson v. Dodds Case Brief Summary
Summary of Dickinson v. Dodds, 2 Ch. D. 463 (1876).
Facts
On Wednesday, June 10, 1874 Dodds (D) sent Dickinson (P) a memorandum in which he
agreed to sell a specified piece of land for 800 pounds with the offer held open until 9AM the
following Friday. Dickinson alleged that he had decided to accept Dodds offer on Thursday
morning but did not contact him immediately because he thought he had until Friday morning
to accept. On Thursday afternoon Dickinson learned that Dodds had offered or agreed to sell
the land to a third party. Dickinson wrote a note accepting the offer and delivered it to his
home, leaving it with his mother-in-law who neglected to give the note to Dodds. On Friday
morning before the original deadline to accept the offer, both Dickinson and his agent gave
Dodds a written acceptance of the offer. Dodds stated that he had already sold the land to
another party the previous day.
Dickinson sued for specific performance. The trial court found in Dickinsons favor and
ordered that Dodds convey the property to him and Dodds appealed.
Issue
Whether a promise to hold an offer open is binding where the other party does not accept
until after he learns that the offeror has already conveyed the property.
Holding and Rule
No. An open offer to sell terminates when the offeree learns that the offeror has already
agreed to sell to someone else.
The court stated that since Dickinson knew that Dodds offer had been implicitly withdrawn
when he learned that he had sold the property to someone else, there was no meeting of the
minds at the time acceptance was made and therefore a binding contract was not formed.
Disposition:
Judgment reversed.
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Martin Walford v. Charles Miles
February 2, 2013 by Vivek Kumar Verma in Contract Law, Fundamentals.
Martin Walford v. Charles Miles
[1992] ADR.L.R. 01/23
(Lock-out and Lock-in Agreements; Uncertainty)
FACTS:
On 17
th
March M agreed that, provided that Ws bank confirmed that W had the necessary
financial resources to purchase Ms business for 2m pounds, they would break off any
negotiations with any third party and would not consider any other alternative and would not
accept a better offer but would deal exclusively with W, with a view to concluding the deal as
soon as possible. M continued to keep in touch with another interested party and on 27
th

March withdrew from the negotiations with W. M later sold the business to the third party. W
sued for breach of contract and for misrepresentation.
The main issue at first place was whether it was a contract or just an agreement to
enter into negotiation?
Is an agreement to negotiate legally enforceable?
Secondly, whether it was a valid lock out agreement which could have been
enforceable in law?
CONTENTION (Plaintiff):
Plaintiff contended that there was a valid contract by virtue of which defendants were bound
to effect the sale of the property. According to him, the consideration for this oral contract
was in the form of his agreeing to continue negotiations and providing comfort letter from his
bankers. He further contended that it was a lock out agreement, thereby providing him the
exclusive opportunity to try and come to terms with the defendant.
HELD:
An agreement to negotiate is unenforceable simply because it lacks the necessary certainty
to have any binding force. When there is any fundamental term left undecided and subject to
negotiation then there is no contract. (S.29)
These Lock-I n Agreements are assumed to make it obligatory for parties to continue to
negotiateonly with each other to conclude a contract until there is a proper reason for any
of them to withdraw. Since a Court in these kinds of agreements will be unable to decide
subjectively whether there was any proper reason that existed for termination of
negotiations save by indulging in discussion as to whether the negotiations were carried in
good faith, hence, these agreements are unenforceable. This is because, the concept of
duty to carry on negotiations in good faith is inherently repugnant to the adversarial position
of the parties involved in negotiations.
However, agreements, supported by consideration, which provide exclusive opportunity to a
party for fixed duration of time to try and come to terms with other party not necessarily in
good faith; and both of which can terminate the negotiations without giving any proper
reason whatsoever; such agreements are called Lock-Out Agreements and are
enforceable in law for commercial reasons: it provides opportunity to offeree to assess the
offer given by other party, while being assured that party so locked-out will not negotiate
with any third party for disposing off the offer.
Since everything agreed upon, except price, was subject to contract, hence, it was
fundamentally left undecided and was merely unenforceable for it was agreement to
negotiate.
The court observed that the statement of letter suggest that not only was defendant
locked out for some unspecified duration of time but was also locked in to dealing
with the appellant, also for an unspecified time.
While lock-in agreements are unenforceable, the court further observed that since
there was no specified duration of time specified in the lock out agreement, hence,
it was not legally enforceable as it lacked necessary certainty. It was however
contended in dissenting judgment in Court of Appeal that the obligation to negotiate
in these circumstances, when the agreement itself does not provide for any time limit,
should endure for a reasonable time: time reasonably necessary to reach a binding
agreement. But, House of Lords held that reading such an implied term will be
equivalent to indirectly imposing duty to negotiate in good faith and would thus be
unenforceable because of inconsistency with the negotiating parties.
On these bases, the court dismissed the appeal of the plaintiff.
-----------------------------------------------------------------------------------------------
Consideration
DEFINITION:
Section 2 (d), The Indian Contract Act, 1872 -
When, at the desire of the promisor, the promise or any other person has done or abstained
from doing, or does or abstains from doing or promises to do or abstain from doing
something, such act or abstinence or promise is called a consideration for the promise.
Other Definitions:
Blackstone: Consideration is the recompense given by a party contracting to the other.
Pollock: An act of forbearance of one party or the promise thereof is the price for whichthe
promise of the other is bought, and the promise thus given for value is enforceable. [Pollock
On Contracts (13th Ed.) p. 133]
Key Provisions:
Section 23: What consideration and objects are lawful, and what not
Section 25: Agreement without consideration, void, unless it is in writing and registered or is
a promise to compensate for something done or is a promise to pay a debt barred by
limitation law
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Combe v. Combe
January 15, 2013 by Vivek Kumar Verma in Consideration, Contract Law, Fundamentals.

Combe v. Combe
[1951] 2 KB 215
(ConsiderationPERestraint of Court Proceedings)
FACTS: A husband, upon divorce, promised his wife certain sum a year as permanent
maintenance. In reliance upon this promise, the wife forbore to apply in the Court for
maintenance. The Husband failed to make the payments and Wife sued him on the promise.
ISSUES:
1) Whether there was any consideration by Wife to the promise made by the Husband?
2) Whether the rule of Promissory Estoppel can be of any avail to Wife?
HELD:
Kings Bench Division:
The only consideration which could be deduced from the circumstances is implied promise
by Wife not to sue Husband for permanent maintenance, but that any promise in restraint of
applying to the Court was void and unenforceable.
Whenever a promise is made with the intention of creating legal relationship-a promise
that is intended to be acted on and was in fact acted on by the other party (here, by
forbearing to sue for 7 years)-then promisor is abstained from going back on the promise
for it will be inequitable for him to do so. (Promissory Estoppel)
Court of Appeal:
There is no consideration merely because there is detrimental action by the promisee in
reliance on the promise, but not in return for it.
In present case, husband neither expressly nor impliedly requested wife to forbear from going
to the Court, hence there was no consideration for husbands promise. Her forbearance was
neither intended by the husband nor was it at the husbands request.
Even if, in return for the promise, wife had promised to refrain from applying to the Court,
such a promise being void and non-binding, would not be any real consideration.
Promissory Estoppel doesnt create new causes of action when none existed before; it is a
shield and not a sword. Principle of Promissory Estoppel is to be employed to obviate the
necessity for consideration in cases where parties are already bound contractually and one
party promises to modify, waive or suspend its strict legal right. But in those cases also, it is
to be used only as a part of cause of action and not an action in itself. (Central London case)
In present case, the principle of PE therefore cant do away with the necessity of
consideration when that is an essential part of the cause of action.