Mailbox Rule for Contracts - Explained
An Offer is Accepted with the Acceptance is Sent
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What is the Mailbox Rule?
The mailbox rule is a default rule that applies when the offeror does not place specific requirements on the manner of acceptance. Under this rule, the offeree accepts the offer when it is sent to the offeror. This could include dropping it in the mail or sending it with a courier. This may also include providing notice of acceptance via email or other electronic communication (regardless of whether the offeror actually checks or reads the email). As such, if an offer is made to multiple offerees, the first offeree to accept in any manner (including by dropping the acceptance in the mail) has a binding contract.
- Example: You offer to sell me your car for $500. I immediately send you a letter accepting your offer and a $500 check. We have a contract as soon as I drop the letter in the mail.
Next Article: What is Consideration - Contracts? Back to: CONTRACT LAW
- What is an Offer?
- When does an offer to contact terminate?
- Counterparty Definition
- Mirror Image Rule?
- Rule for Sale of Goods
- Silence is Not Acceptance?
- Shrink-wrap Agreement Definition
- Click-Wrap Agreement Definition
- What is Consideration?
- What is Promissory Estoppel?
What do you think about the mailbox rule? Should it be the default rule in contracts? Why or why not? Practice Question: Pamela is a musician and writer. She offers to sell her copyright to a popular song to Devon and Mark. Devon drops his acceptance of the offer in the mail on Friday evening. On Saturday morning, Pamela meets with Mark and signs an agreement transferring the copyright to him. What is the likely result in this situation?
- The offer is accepted once the acceptance is communicated. In this situation, the moment when the letter is mailed by the offeree. The general rule provides that acceptance is communicated up on dispatch of the letter and becomes effective once the offeror receives the letter. However, the letter communicating the acceptance must be dispatched timely and in a proper manner so as to avoid any inconveniences. If the acceptance letter is dispatched within the correct time, a valid contract is established. This means that the time the offeror receives the letter is not a determining factor.