ACCA LW · Chapter 2 · Question 4 of 12
Chen posts a letter accepting an offer on Monday. The letter is properly addressed and stamped but is lost in the post and never arrives. The offer said nothing about how acceptance should be communicated, and use of the post was reasonable. When was a contract formed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) On Monday, when the letter was posted
Explanation
Under the postal rule in Adams v Lindsell, acceptance is complete when a properly addressed and stamped letter is posted, where post is a reasonable method of acceptance. Household Fire Insurance v Grant confirms that this applies even if the letter is lost. The offeror can exclude the rule by requiring actual communication, as in Holwell Securities v Hughes, but did not do so here.
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