Negating the effect of the postal rule stephen graw

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Negating the effect of the postal rule
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© Stephen Graw 2012 The offeror can negate the effect of the postal rule if he or she clearly indicates that actual communication of acceptance is required. This is because the postal rule only applies if acceptance by post is within the contemplation of the parties . Therefore, if the offeror stipulates that acceptance must actually arrive to be effective the postal rule cannot operate. Words such as ‘if you want to accept this offer I must have your reply by noon on Friday’ would have the necessary effect. Limits to the postal rule The postal rule is limited to acceptances by mail or telegram. Attempts to extend its operation to acceptances by telex, fax, telephone, email and other instantaneous or near instantaneous means of modern communication have failed. With all of these other means the rule is still that acceptance only occurs upon actual communication. Revocation of acceptance Like offers, acceptances can be revoked — provided the ‘acceptor’ communicates the fact of revocation before the acceptance is received . This is because acceptance is not effective until it has been communicated. Therefore, if a revocation of acceptance reaches the offeror before the acceptance does, the revocation destroys the offer—leaving nothing to accept. This obviously creates problems with posted acceptances which are subsequently revoked and, regrettably, those problems are, so far, unresolved. 3.2.4 Battle of the forms One important commercial consequence of the rules regarding acceptance is what is called the “battle of the forms”. Quite often, businesses will deal on their own “standard forms” (that is, one business will have a standard order form with its own printed terms, usually on the back of the form, and the other business will have a standard delivery form with its own pre-printed terms setting out the basis on which it is prepared to deal. If we assume that the buyer’s standard order form specifies that “We will pay for any goods that are supplied pursuant to this order 30 days after delivery” and the seller’s standard delivery form requires that “Goods must be paid for within 7 days of delivery”, when, in law, must the goods be paid for? The answer to this “battle of the forms” can be found in the rules governing acceptance. When the buyer submits the order on its standard order form, that is an “offer”. If the seller wants to accept that offer he must do so in the same terms (ie he or she must accept all of the terms — including the terms regarding payment. If the seller changes any of those terms (as happens here) the seller is not accepting but is, instead, making a counter-offer (to sell on 7 days credit). The buyer must then decide whether to accept or reject the seller’s counter-offer. If he or she accepts delivery of the goods with the delivery docket (whether he or she actually reads it) and then uses those goods he or she is deemed to have accepted the seller’s counter-offer — and the contract is formed on the seller’s terms.
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