Does the Postal Acceptance Rule Apply to Email?

Probably not, in Australia anyway.

What is the postal acceptance rule? It is the rule (stated by the High Court in a case in 1957 which is still good law) that a contractual offer may be accepted by post and will be deemed accepted at the time the letter is sent – not when it is proven received – if it was contemplated that post was a means by which the offer might be accepted.  However, some old English cases (also accepted in Australia) say that this rule will not apply where one is using almost “instantaneous” forms of communication – at the time fax and telex were contemplated, but this was before email.

If email is accepted as “almost instantaneous”, the argument is that the rule does not apply, which would mean that acceptance by email of a contractual offer will occur only where and when the message is received as that is when it is communicated.

However, the competing argument is that email is often delayed between servers (in fact, today we received 89 emails which were sent at varying times over the last 2 days because our email service provider had a little problem we didn’t know about) – so the argument would then be, if email is not “almost instantaneous”, that the rule should apply as long as it was anticipated that email was a method by which acceptance could be communicated, which would mean then that acceptance by email of a contractual offer will occur only where and when the message is sent from as that would then be when it is communicated.

The Singapore High Court in a case called Chwee Kin Keong v Pte Ltd gave some thought to this in 2004 and concluded that, at least in Singapore, the postal acceptance rule should not apply because email is for the most part almost instantaneous.

There is Australian federal and state legislation about electronic transactions which sets out certain optional rules about when electronic messages are deemed to have been sent and received, but the better view is probably that these are not intended to apply or deny the postal acceptance rule, but rather simply to clarify the time and place of receipt of certain communications.

However, a Federal Court judge on 20 May 2009 in a case called Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 4) did have something to say about it.  In particular, he said that “email is often, but not invariably, a form of near instantaneous communication … I consider that there are analogies to be drawn with the way the law developed in relation to telex communications in an earlier era where what I have termed “the instantaneous communication rule” came to be adopted … Thus, by analogy with cases concerning the position with what were, or were treated as, other forms of instantaneous communication, I consider that the contract was made where the acceptance was received”.

In other words, His Honour thought the postal accceptance rule should not apply to email.  We think this was a good decision.

Using His Honour’s logic, the postal acceptance rule will also likely not apply to SMS, IM or other modern forms of communication that are instantaneous or close to it.


1 Response to "Does the Postal Acceptance Rule Apply to Email?"

  • Bronwyn Coulthart says:
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