ICAEW BL · Chapter 2 · Question 3 of 10
On Monday morning Kestrel Ltd posts an acceptance of a written offer from Barrow plc, which had invited a reply by post. On Monday afternoon Barrow plc posts a letter revoking the offer. The revocation reaches Kestrel Ltd on Tuesday and the acceptance reaches Barrow plc on Wednesday. When, if at all, was a contract formed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) On Monday, when the acceptance was posted
Explanation
Where acceptance by post is reasonable or invited, the postal rule makes acceptance effective when the letter is properly posted. A revocation, by contrast, takes effect only when it is actually received. Acceptance on Monday morning came before the revocation arrived on Tuesday, so a binding contract was formed on Monday.
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