Postal acceptance rule

The legal rule that when an offer in contract is expected to be accepted by post, the time and place at which the acceptance is posted is the time and place at which the contract will be taken to have been formed.  The rule will not apply where the offeror does not intend the contract to become binding until they receive the acceptance.

In Australia, the postal acceptance rule has been interpreted more narrowly than in other common law jurisdictions. In the case of Tallerman & Co Pty Ltd v Nathan’s Merchandise (1957) Dixon CJ and Fullagar J stated that:

“The general rule is that a contract is not completed until acceptance of an offer is actually communicated to the offeror, and a finding that a contract is completed by the posting of a letter of acceptance cannot be justified unless it is to be inferred that the offeror contemplated and intended that his offer might be accepted by the doing of that Act.”

Here, the High Court included the element of intention as a requirement for the operation of the postal acceptance rule, rendering its operation more limited.