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Corbin on Contracts

Copyright 2007, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

PART I FORMATION OF CONTRACTS

TOPIC A OFFER AND ACCEPTANCE

CHAPTER 3 ACCEPTANCE AND REJECTION OF OFFER

1-3 Corbin on Contracts § 3.24

§ 3.24 Acceptance by Post

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As has already been stated, an offeror, at whim, can specify any mode of acceptance. By the offer, the power of acceptance is created. The power can be as limited as the offeror desires. Without regard to the mode in which the offer is communicated, it can require acceptance by telegraph, telephone, or letter, and it can require that the acceptance shall be received instead of merely started.n1 But in order to limit the power of acceptance, the offeror must either communicate the limitation to the offeree before the latter accepts, or else make the offer in such manner and terms that the offeree has reason to know that the power is so limited. Because such a limitation displaces the customary rule, it must be clear and explicit.n2 Assuming the offeree's power of acceptance is so limited, a purported acceptance that does not conform to the limits of the offer is a counter-offer that may in turn be accepted by the original offeror.n3

Where the parties are negotiating at a distance from each other, the most common method of making an offer is by sending it by mail, and more often than not the offeror has specified no particular mode of acceptance. In such a case, or in any case where a mailed acceptance is reasonable, it is now the prevailing rule that the offeree has power to accept and close the contract by mailing a letter of acceptance within a time specified in the offer or, if none, within a reasonable time. The contract is regarded as made at the time and place that the letter of acceptance is put into the possession of the postal service.n4 Generations of law students have come to know this as the ''mailbox rule,'' or the rule in Adams v. Lindsell.

In holding that the act of posting the letter constitutes the operative act that closes the deal (''makes'' the contract), it does not follow that the local system of law that prevails where the letter is dropped in the mail box or the hotel mail chute (where the ''last act'' is done) is the system that controls either the interpretation or the legal operation of the contract that has been made. Dogmatic statements wherever they are found, in court opinions, in learned treatises, in official ''Restatements,'' cannot be relied on. These statements are in conflict and confusion. In huge numbers of cases, the offer, the acceptance, the performance, and the action for enforcement take place in different States or countries. There are many ''systems'' of law that have been considered and applied: lex fori, lex loci contractus, lex solutionis, lex rei sitae, lex domiciliae, lex validitatis, besides any system of law that the parties have specified. The confusion has been greatly confounded by the assumption that there is always one system of law that must be the controlling one, and that rights recognized by that system must be recognized and enforced elsewhere.n5

Various reasons have been given for holding that acceptance is operative on mailing, and for a long time some learned theorists and judges denied that such was or could be the rule. The objections have now mostly died away, and no one doubts that the courts can make such a rule, because they have in fact made it. In as much as the rule seems to be causing no great dissatisfaction, it may now be supposed that the courts are not likely to unmake it.

The reason that is most often given for the rule is that the offeror, by sending the offer by mail, has made the post an authorized agent to receive and carry the acceptance. Sometimes it is said that the post is the common agent of both parties.n6 It requires only slight consideration to perceive that this reasoning is defective. The term ''agent'' is generally used to refer only to some human person with power to act on the principal's behalf. The ''post'' is not a person, although there are many persons in the postal service, and it is by no act of any such person that the making of the contract is consummated. A letter box on the corner is neither a person nor an agent, and yet the acceptance is effective when the letter of acceptance is dropped into that box.n7 It is the offeree who personally or by some authorized person drops the letter in the box. It is the offeree who has the power of acceptance and who exercises it. The ''box'' has no power and does no act. It is true that a postman may thereafter remove the letter from the box, but the contract has already been made and the removal has no legal operation. All this is equally true in case the letter is mailed by dropping it through the proper slot inside of a post office building.

Sometimes it is said that the mailing of the letter of acceptance makes the contract for the reason that by the act of mailing the offeree irrevocably surrenders possession and control over it. The present post office regulations provide, however, that the sender of a letter can recall it. The offeree can stop delivery by telegraphing ahead and thereby can cause the return of the letter. This is discussed in a later section (§ 3.26).

A better explanation of the existing rule seems to be that in such cases the mailing of a letter has long been a customary and expected way of accepting the offer. It is ordinary business usage. More than this, however, is needed to explain why the letter is operative on mailing rather than on receipt by the offeror. Even though it is business usage to send an offer by mail, it creates no power of acceptance until it is received. Indeed, most notices sent by mail are not operative unless actually received.

The additional reasons for holding that a different rule applies to an acceptance and that it is operative on mailing may be suggested as follows: When an offer is by mail and the acceptance also is by mail, the contract must date either from the mailing of the acceptance or from its receipt. In either case, one of the parties will be bound by the contract without being actually aware of that fact. If we hold the offeror bound on the mailing of the acceptance, the offeror may change position in ignorance of the acceptance. Even though the offeror waits a reasonable time before acting, the offeror may still remain unaware that a binding contract has come into being because the letter of acceptance is delayed, or is actually lost or destroyed, in the mails. Therefore this rule is going to cause loss and inconvenience to the offeror in some cases. But if we adopt the alternative rule that the letter of acceptance is not operative until receipt, it is the offeree who is subjected to the danger of loss and inconvenience. The offeree cannot know that the letter has been received and that a binding contract has been made until a new communication is received. The letter of acceptance may never have been received and so no letter of notification is sent to the offeree, or the letter of acceptance may have been received, and the letter of notification may be delayed or entirely lost in the mails. One of the parties must carry the risk of loss and inconvenience.n8 We need a definite and uniform rule as to this. We can choose either rule, but we must choose one. We can put the risk on either party, but we must not leave it in doubt. The party not carrying the risk can then act promptly and with confidence in reliance on the contract. The party carrying the risk can insure against it. The business community could no doubt adjust itself to either rule, but the rule throwing the risk on the offeror has the merit of closing the deal more quickly and enabling performance more promptly. It must be remembered that in the vast majority of cases the acceptance is neither lost nor delayed, and promptness of action is of importance in all of them. Also it is the offeror who has invited the acceptance.n9 However, this pro-offeree rule has been stood on its head and it has been held that the offeree cannot overtake a mailed acceptance by telephone or other means of prompter communication. Nothing but pure conceptualism and a fear of bad faith speculation prevents a court from ruling that an acceptance can be overtaken by a withdrawal.n10

A third possibility has been suggested, but little considered. This is that the mailing of the acceptance shall consummate a conditional contract, one that at once becomes irrevocable by either party but that is conditional upon actual receipt of the letter within a reasonable time by the offeror. To this rule, also, the business community could no doubt adjust itself, but it has no such advantages in the allocation of risk as to justify advocating its adoption at the present time.n11

If the offer has not itself been sent by mail, the theory that the post is the common agent of the parties breaks down. Also, there is so much the less reason for holding that the offeror has authorized an acceptance by mail.n12 As in all other cases, the offeror may have expressly authorized such an acceptance. In some well-reasoned cases, it has been held that the power to accept by mailing a letter may rest upon facts other than an express or implied authorization. Even though the offer was not made by mail and there was no authorization, the existing circumstances may be such as to make it reasonable for the offeree to accept by mail and to give the offeror reason to know that the acceptance is likely to be so made. Such may be usage and business practice. In such case, the acceptance is operative on mailing.n13

The fact that an offer is sent by telegram is not itself evidence of an authorization to accept by mail-indeed it tends to show that a more speedy form of acceptance is desired. Yet the nature of the proposed contract, the time of the expected performance, the absence of price fluctuation, and other factors may be sufficient to warrant a decision that an acceptance by mail is operative on mailing.n14

An offeror can always so word the offer and so limit the power of acceptance as to make the receipt of the acceptance necessary to the creation of a contract. Indeed, if the offer merely says, ''Notice of your acceptance must be given within 30 days,'' this may be held to mean that the notice must be received within that time. It would be different if it says, ''Please reply by return of post.'' The latter specifies a mode of communication but does not make receipt necessary. Where an already completed contract contained a provision creating an option to be exercised by the giving of notice within a stated time, it has been held that it is not enough that the notice was mailed within that time.n15 Here, the question is one of interpretation of language.n16 Probably, when parties use the word ''notice,'' they usually mean a communication received.n17

So, also, where in an already completed contract, a power of revocation or termination by notice is reserved, the notice is not operative until actually received.n18

If the circumstances are such that the acceptance is operative upon starting it by mail or telegraph, the fact that it is delayed on the wayn19 or even that it is lost and never receivedn20 does not affect the validity of the contract already made. This presupposes that such loss or delay is not caused by the fault of the offeree. Of course, in these cases there is likely to be injury or inconvenience, but it is the risk of this that someone has to carry. The risk is placed on the offeror unless the offer is so phrased as to shift it.

The United Nations Convention on Contracts for the International Sale of Goods takes a position in opposition to the traditional common law view. Article 18(2) of the Convention states: ''An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror,''n21 and Article 23 provides that a contract is formed at the moment of acceptance. Article 22 of the Convention provides: ''An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective.''

The United Nations Convention represents a series of compromises between common law and civil law notions. In many civil law countries, offers are generally irrevocable for a stated or reasonable time. This rule favoring the offeree, contrasts with the common law's general pro-offeror rule permitting revocation of offers. To balance the common law's bias toward offerors on the issue of revocation, the common law developed the mailbox rule which shortens the period in which an offer may be revoked. To balance the civil law's bias toward offerees on the issue of revocability, the civil law developed a rule favoring the offeror on the question of when an acceptance takes effect. The Convention approximates the common law view on the question of revocability and the civil law view on the question of the time of acceptance.n22

The misaddressed or otherwise defective posting. The common law mailbox rule presupposes that the acceptance is properly stamped and addressed.n23 If it is improperly stamped or addressed, classical thinking concluded that the offeree lost the benefit of the mailbox rule and that the acceptance is effective when and if it arrives and only if the offer is still open at that time. Section 1-201 of the Uniform Commercial Code, however, provides a somewhat different rule. It reads:

''Send'' in connection with any writing or notice means to deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed... The receipt of any writing or notice within the time at which it would have arrived if properly sent has the effect of a proper sending. (Emphasis supplied).

The Restatement (Second) of Contracts § 67 adopts a similar rule, providing:

Where an acceptance is seasonably dispatched but the offeree uses means of transmission not invited by the offer or fails to exercise reasonable diligence to insure safe transmission, it is treated as operative upon dispatch if received within the time in which a properly dispatched acceptance would normally have arrived.

Although similar, they do not necessarily yield the same result. Consider the following hypothetical case:

A makes an offer to B by mail on Monday requesting a reply by mail to be sent not later than Thursday noon. The normal course of post between A and B's offices is one day. B mails an acceptance on Tuesday which A does not receive until Thursday morning because the letter is not properly stamped and addressed. In the interim, on Wednesday afternoon, B receives a letter of revocation.

Under the formulation of the Uniform Commercial Code, the acceptance would appear to be ineffective because the letter of acceptance did not arrive within the time the letter would have arrived if properly dispatched. Under the formulation of the Restatement (Second), if literally interpreted, the acceptance would be effective because it arrived within the time in which a hypothetical properly dispatched acceptance would normally have arrived. For example, a letter properly dispatched Wednesday morning would have arrived at the time the actual letter arrived.

Under the United Nations Sales Convention, because an acceptance is ineffective until received, the problem discussed here does not arise. The simple question is whether the acceptance arrived while the offer was open.

Legal Topics:

For related research and practice materials, see the following legal topics:

Contracts LawFormationAcceptanceMailbox RuleContracts LawFormationAcceptanceMethods of AcceptanceGeneral OverviewContracts LawFormationAcceptanceReasonable Time

FOOTNOTES:

(n1)Footnote 1. U.S.- Eliason v. Henshaw, 17 U.S. (4 Wheat.) 225, 4 L.Ed. 556 (1819) .

Ark. - Goode v. Universal Plastics, Inc., 247 Ark. 442, 445 S.W.2d 893 (1969) .

Colo. - Union Interchange, Inc. v. Sierota, 355 P.2d 1089 (Colo.1960) .

Ga. - Holland v. Riverside Park Estates, 214 Ga. 244, 104 S.E.2d 83 (1958) .

Ill. - Brach v. Matteson, 298 Ill. 387, 131 N.E. 804 (1921) .

Ky. - Postal Tel. Cable Co. v. Louisville Cotton Seed Oil Co., 140 Ky. 506, 131 S.W. 277 (1910) .

Mass. - Lewis v. Browning, 130 Mass. 173 (1881) .

N.Y. - Spratt v. Paramount Pictures, Inc., 178 Misc. 682, 35 N.Y.S.2d 815 (1942) .

Pa. - Glenway Indus., Inc. v. Wheelabrator-Frye, Inc., 686 F.2d 415 (6th Cir.1982) .

Tenn. - Lexington Housing Auth. v. Continental Cas. Co., 210 F.Supp. 732 (W.D.Tenn.1962) .

Tex. - American Heritage Life Ins. Co. v. Koch, 721 S.W.2d 611 (Tex.Civ.App.1986) , writ refused n.r.e.

Eng. - Byrne v. Van Tienhoven, L.R. 5 C.P.D. 344 (1880) .

An offer to transfer title on receipt of notes for the price can be revoked at any time before such receipt. McCone v. Eccles, 42 Nev. 451, 181 P. 134 (1919) . However, such an offer can become irrevocable by conduct in reliance upon the offer. See § 2.31 above.

(n2)Footnote 2.

U.S. - U.S. Ore Corp. v. Commercial Transport Corp., 369 F.Supp. 792 (E.D.La.1974) .

Mich. - Allied Steel & Conveyors, Inc. v. Ford Motor Co., 277 F.2d 907 (6th Cir.1960) .

N.Y. - Vassar v. Camp, 11 N.Y. 441 (1844) .

Okl. - Mid-Continent Petroleum Corp. v. Russell, 173 F.2d 620 (10th Cir.1949) .

Tex. - Lone Star Gas Co. v. Coastal States Gas Producing Co., 388 S.W.2d 251 (Tex.Civ.App.1965) . This was a venue case. A proposed contract was to be void ''unless executed by you and returned to us on or before June 30....'' Held: mailing the signed document met the ''returning'' requirement and created a contract on dispatch. See also Fujimoto v. Rio Grande Pickle Co., 414 F.2d 648 (5th Cir.1969) .

Utah - Crane v. Timberbrook Village, Ltd., 774 P.2d 3 (Utah App.1989) .

Wis. - Zimmerman Bros. & Co. v. First National Bank, 219 Wis. 427, 263 N.W. 361 (1935) .

(n3)Footnote 3.

U.S. - Avila Group, Inc. v. Norma J. of California, 426 F.Supp. 537 (S.D.N.Y.1977) (Federal Arbitration Act).

D.C. - Vaulx v. Cumis Ins. Soc., 407 A.2d 262 (D.C.App.1979) .

Ill. - Zinni v. Royal Lincoln-Mercury, Inc., 84 Ill.App.3d 1093, 40 Ill.Dec. 511, 406 N.E.2d 212 (1980) .

N.C. - Executive Leasing Ass'n, Inc. v. Rowland, 30 N.C.App. 590, 227 S.E.2d 642 (1976) .

(n4)Footnote 4.

U.S. - Burton v. United States, 202 U.S. 344, 26 S. Ct. 688, 50 L.Ed. 1057 (1906) ; Patrick v. Bowman, 149 U.S. 411, 13 S.Ct. 811, 37 L.Ed. 790 (1893) ; Tayloe v. Merchants' Fire Ins. Co., 50 U.S. (9 How.) 390, 13 L.Ed. 187 (1850) ; Kirkhof Manufacturing Corp. v. Sem-Torq, Inc., 312 F.2d 578 (6th Cir.1963) (a conflicts case regarding a sales representative's commissions; ''sale'' was made where the purchasers accepted the offers of the manufacturer); Barnebey v. Barron G. Collier, Inc., 65 F.2d 864 (8th Cir.1933) ; Raymer v. Netherwood, 257 Fed. 284 (7th Cir.1919) ; Stephen M. Weld & Co. v. Victory Mfg. Co., 205 Fed. 770 (E.D.N.C.1913) .

Ala. - Watkins Co. v. Hill, 214 Ala. 507, 108 So. 244 (1926) .

Cal. - Soldau v. Organon Inc., 860 F.2d 355 (9th Cir.1988) , where the offeree succeeded in retrieving the letter of acceptance from the mails. Noted under § 3.26 below.

Conn. - Mercer Elec. Mfg. Co. v. Connecticut Electric Mfg. Co., 87 Conn. 691, 89 A. 909 (1914) .

Fla. - Morrison v. Thoelke, 155 So.2d 889 (Fla.App.1963) , is an uncommonly thorough review of the authorities and reasoning, both judicial and academic. Ironically, the pro-offeree rule was invoked against an offeree who overtook receipt of his acceptance by a telephone call.

Ga. - Rowntree Bros. v. Bush, 28 Ga.App. 376, 111 S.E. 217 (1922) .

Ill. - Geary v. Great Atlantic & Pacific Tea Co., 366 Ill. 625, 10 N.E.2d 350 (1937) .

Iowa - Nertney v. National Fire Ins. Co., 199 Iowa 1358, 203 N.W. 826 (1925) ; Lucas v. Western Union Tel. Co., 131 Iowa 669, 109 N.W. 191 (1906) ; Hayne v. Cook, 252 Iowa 1012, 109 N.W.2d 188 (1961) , acceptance mailed to one through whom the offer had been sent, offeree (vendor) bound in spite of his attempted withdrawal.

Md. - Reserve Ins. Co. v. Duckett, 249 Md. 108, 238 A.2d 536 (1968) , holding that an insurance policy had been renewed in time by the mailing of the new premium within the life of the existing policy.

Neb. - Corcoran v. Leon's Inc., 126 Neb. 149, 252 N.W. 819 (1934) .

N.J. - Northampton Mut. Live Stock Ins. Co. v. Tuttle, 40 N.J.L. 476 (1878) .

N.Y. - Wester v. Casein Co. of America, 206 N.Y. 506, 100 N.E. 488 (1912) ; Vassar v. Camp, 11 N.Y. 441 (1854) ; Mactier's Adm'rs v. Frith, 6 Wend. 103 (1830) .

N.D. - Farley v. Champs Fine Foods, 404 N.W.2d 493 (N.D.1987) , recognizes the rule but affirms trial judge's determination that the acceptance was mailed after the offer had been revoked in a telephone conversation.

Okl. - McAlister v. Klein, 81 Okl. 291, 198 P. 506 (1921) .

Or. - Williams v. A.C. Burdick & Co., 63 Or. 41, 125 P. 844 , adhered to, 63 Or. 41, 126 P. 603 (1912) .

Pa. - McClintock v. South Penn Oil Co., 146 Pa. 144, 23 A. 211 (1892) .

Tex. - B & B Developers v. Ego Resources Corp., 613 S.W.2d 797 (Tex.Civ.App.1981) ; Farmers' Guaranty State Bank v. Burrus Mill & El. Co., 207 S.W. 400 (Tex.Civ.App.1918) ; Kennedy Mercantile Co. v. Western Union Tel. Co., 167 S.W. 1094 (Tex.Civ.App.1914) .

Eng. -Household Fire & Acc. Ins. Co. v. Grant, L.R. 4 Ex.D. 216 (1879).

Can. -Baril v. Charlebois, 64 Que.S.C. 421 (1926); Magann v. Auger, 31 S.C.R. 186 (1901).

The contract is regarded as made in the state where the letter of acceptance is mailed. Bank of Yolo v. Sperry Flour Co., 141 Cal. 314, 74 P. 855 (1903) , acceptance by telephone.

Me. - Emerson Co. v. Proctor, 97 Me. 360, 54 A. 849 (1903) .

Eng. -Cowan v. O'Connor, L.R. 20 Q.B.D. 640 (1888).

See also:

Eng. - Newcomb v. De Roos, 2 El. & El. 271 (1859) ; Taylor v. Jones, L.R. 1 C.P. 87 (1875).

Communication to the offeree's own agent of an expression of acceptance, with instructions to the agent to deliver it to the offeror, is not operative as an acceptance.

Del. - Coxe v. Coxe, 21 Del.Ch. 30, 180 A. 612 (1935) .

Ind. - New v. Germania Fire Ins. Co., 171 Ind. 33, 85 N.E. 703 (1908) .

A letter is not mailed by giving it to a postman who is not an official collector of mail. In re London & Northern Bank, [1900] 1 Ch. 220 .

If an offeror maintains a private box for the receipt of business communications, an acceptance dropped in that box may be operative at once. Howard v. Daly, 61 N.Y. 362 (1875) . See U.C.C. § 1-201(26)(b).

(n5)Footnote 5. This was the assumption of Professor Joseph Beale, drafted by him in the American Law Institute's Restatement, Conflict of Laws. This approach was abandoned in the formulation of the Restatement (Second) of Conflict of Laws.

(n6)Footnote 6.

Eng. -It was so argued in Household Fire & C. Acc. Ins. Co. v. Grant, L.R. 4 Ex.D. 216 (1879).

U.S. - Walrus Mfg. Co. v. New Amsterdam Cas. Co., 184 F.Supp. 214 (S.D.Ill.1960) .

(n7)Footnote 7. ''The street boxes and street delivery are a legal part of the post office system, and a letter deposited in one of these must be considered as being delivered at the post office. Abb. Trial Ev. 433-434; Bank v. De Groot, 7 Hun. 210 ; Pearce v. Langfit, 101 Pa. 507 .'' Morse, J., in Wood v. Callaghan, 61 Mich. 402, 411, 28 N.W. 162, 165 (1886) .

Handing an acceptance letter to one's own mail clerk is not effective as an acceptance. It has not been put out of one's possession. Gibbs v. American S. & L. Ass'n, 217 Cal. App.3d 1372, 266 Cal. Rptr. 517 (1990) .

(n8)Footnote 8. ''If a bargain can be completed between absent parties, it must be when one of them cannot know the fact whether it be or be not completed. It cannot begin to be obligatory on the one before it is on the other; there must be a precise time when the obligation attaches to both, and this time must happen when one of the parties cannot know that the obligation has attached to him; the obligation does not, therefore, arise from a knowledge of the present concurrence of the wills of the contracting parties.'' Mactier v. Frith, supra.

In Adams v. Lindsell, 1 Barn. & Ald. 681 (1818) , it was argued, ''Till the plaintiff's answer was actually received there could be no binding contract between the parties; and before then the defendants had retracted their offer by selling the wool to other persons. But the Court said that if that were so, no contract could ever be completed by the post. For if the defendants were not bound by their offer when accepted by the plaintiffs till the answer was received, then the plaintiffs ought not to be bound till after they had received the notification that the defendants had received their answer and assented to it. And so it might go on ad infinitum.''

In Tayloe v. Merchants' Fire Ins. Co., 50 U.S. (9 How.) 390, 13 L. Ed. 187 (1850) , the court said: ''... a little reflection will show that, in all cases of contracts entered into between parties at a distance by correspondence, it is impossible that both should have a knowledge of it the moment it becomes complete. This can only exist where both parties are present.''

(n9)Footnote 9. In Henthorn v. Fraser, [1892] 2 Ch. 27 , Lord Chancellor Herschell said: ''Applying the law thus laid down by the Court of Appeal, I think in the present case an authority to accept by post must be implied. Although the plaintiff received the offer at the defendants' office in Liverpool, he resided in another town, and it must have been in contemplation that he would take the offer, which by its terms was to remain open for some days, with him to his place of residence, and those who made the offer must have known that it would be according to the ordinary usages of mankind that if he accepted it he should communicate his acceptance by means of the post. I am not sure that I should myself have regarded the doctrine that an acceptance is complete as soon as the letter containing it is posted as resting upon an implied authority by the person making the offer to the person receiving it to accept by those means. It strikes me as somewhat artificial to speak of the person to whom the offer is made as having the implied authority of the other party to send his acceptance by post. He needs no authority to transmit the acceptance through any particular channel; he may select what means he pleases, the postoffice no less than any other. The only effect of the supposed authority is to make the acceptance complete so soon as it is posted, and authority will obviously be implied only when the tribunal considers that it is a case in which this result ought to be reached. I should prefer to state the rule thus: Where the circumstances are such that it must have been within the contemplation of the parties that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of an offer, the acceptance is complete as soon as posted.''

This language is adopted in Nertney v. National Fire Ins. Co., 199 Iowa 1358, 203 N.W. 826 (1925) , and Farmers' Produce Co. v. McAlester Storage & Com. Co., 48 Okl. 488, 150 P. 483 (1915) .

(n10)Footnote 10. It is suggested that this would be the proper ruling. Dempsey v. King, 662 S.W.2d 725 (Tex.Civ.App.1983) . See § 3.26 below.

There are numerous more radical criticisms of the mailbox rule. See, most recently, Beth A. Eisler, Default Rules for Contract Formation by Promise and the Need for Revision of the Mailbox Rule, 79 Ky.L.J. 557 (1990-91).

(n11)Footnote 11. In Household Fire & C. Acc. Ins. Co. v. Grant, L.R. 4 Ex.D. 216 (1879), Lord Justice Thesiger said: ''To me it appears that in practice a contract complete upon the acceptance of an offer being posted, but liable to put an end to by an accident in the post, would be more mischievous than a contract only binding upon the parties to it upon the acceptance actually reaching the offeror, and I can see no principle of law from which such an anomalous contract can be deduced.''

(n12)Footnote 12. Scottish-American Mortg. Co. v. Davis, 96 Tex. 504, 74 S.W. 17 (1903) , held that acceptance by mail was not authorized since the offer was not by mail, and that a mailed acceptance could therefore be recalled.

(n13)Footnote 13.

Eng. - Henthorn v. Fraser [1892] 2 Ch. 27 , offer delivered in person; Household Fire & C. Acc. Ins. Co. v. Grant, L.R. 4 Ex.D. 216 (1879), offer put in the hands of offeree's soliciting agent.

Restatement (Second) of Contracts, § 64, reads: Unless the offer provides otherwise, (a) an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree's possession, without regard to whether it ever reaches the offeror, but (b) an acceptance under an option contract is not operative until received by the offeror.

Restatement (Second) of Contracts, § 65, reads: ''Unless circumstances known to the offeree indicate otherwise, a medium of acceptance is reasonable if it is the one used by the offeror or one customary in similar transactions at the time and place the offer is received.'' This is in accord with U.C.C. § 2-206.

(n14)Footnote 14.

Okl. - Farmers' Produce Co. v. McAlester Storage & Com. Co., 48 Okl. 488, 150 P. 483 (1915) .

And, see, Polhamus v. Roberts, 50 N.M. 236, 175 P.2d 196, 170 A.L.R. 991 (1946) .

(n15)Footnote 15.

Mich. - Starr v. Holck, 318 Mich. 452, 28 N.W.2d 289, 172 A.L.R. 413 (1947) .

Minn. - Hoban v. Hudson, 129 Minn. 335, 152 N.W. 723 (1915) ''provided that the said Hoban shall first give written notice to the undersigned of his election to accept said refund on or before April 8.''

Cf. Shubert Theatrical Co. v. Rath, 271 Fed. 827 (2d Cir.1921) ; Barnebey v. Barron G. Collier, Inc., 65 F.2d 864 (8th Cir.1933) .

See § 264, Options, Form of Acceptance.

(n16)Footnote 16.

Conn. - Getty Refining & Marketing Co. v. Zwiebel, 604 F.Supp. 774 (D.Conn.1985) . A lease contained an option to purchase and stated that all notices were to be deemed duly given if ''forwarded'' by either party by registered mail to the other. It was held that the lease contemplated effective exercise of the option upon dispatch.

Mass. -In McTernan v. Le Tendre, 4 Mass. App. Ct. 502, 351 N.E.2d 566 (1976) . LeTendre's 60 day option to buy an inn and its furnishings required ''acceptance'' within the 60 days. He mailed it on the 60th day, it was received on the 62nd day. The court held that a valid contract was formed relying on this section for the rule that acceptance by mail is effective on posting. The court distinguished the rule of § 264 of this treatise, that the word ''notice'' in an option contract means ''notice received'', and not ''notice mailed'', on the ground that here the contract used the word ''acceptance'' thereby evidencing some reason to believe that ordinary acceptance rules stated in this section were intended to apply.

In re Ionosphere Clubs, Inc., 111 B.R. 436 (S.D.N.Y.1990) (applying Mass. law). A lease contained an option to renew, which stated ''said option may be exercised by written notice ... delivered or sent ... at least one (1) month prior to expiration of the term of the Present Lease.'' An alleged oral acceptance that was timely and a mailed acceptance that was late were held to be ineffective. While the language allowed for finding that the option could be accepted by the dispatch of an acceptance, a dispatch within 30 days was untimely. The word ''may'' was found to be mandatory and not merely permissive. ''It is clear that the term 'may', when read in context, refers to the fact that the option is discretionary and may or may not be exercised. It does not refer to the manner of exercise.'' 111 Bankr. at 441 .

Tex. - Franklin Life Ins. Co. v. Winney, 469 S.W.2d 21 (Tex.Civ.App.1971) , writ denied n.r.e. The insured mailed a letter requesting the insurer to send him the cash value of his policy, but died before the letter reached the insurer. The beneficiaries demand the face value of the policy. The policy permitted termination by ''written request ... filed at its home office.'' The court held for the beneficiaries. The insurer could specify any method of compliance it chose. It had dictated a method of accepting the option that required actual receipt at the home office.

(n17)Footnote 17. The Miller Act requires ''written notice ... within 90 days''. It also provides that such notice shall be served by registered mail. The court while recognizing that ''notice'' normally means ''notice received'', the normal meaning was undercut by the provision with respect to service of notice by registered mail. Thus, ''notice'' means in this context, ''notice dispatched.'' United States use of Crowe v. Continental Casualty Co., 245 F.Supp. 871 (E.D. La. 1965).

The Uniform Commercial Code § 1-201(26) defines the giving of notice in terms of dispatch and the receipt of notice in terms of its coming to the attention of the addressee or its due delivery.

(n18)Footnote 18.

U.S. -This section is quoted in N.L.R.B. v. Vapor Recovery Systems Co., 311 F.2d 782, 785 (9th Cir.1962) , holding that where a collective bargain provided that it would be automatically renewed unless either party gave 60 days notice, prior to the end of the contract period, of a desire to terminate, the notice was not operative prior to its actual receipt.

Iowa - Oldfield v. Chevrolet Motor Co., 198 Iowa 20, 199 N.W. 161, 35 A.L.R. 889 (1924) ; Wheeler v. McStay, 160 Iowa 745, 141 N.W. 404 (1913) .

N.J. - Fritz v. Pennsylvania Fire Ins. Co., 85 N.J.L. 171, 88 A. 1065 (1913) .

N.Y. - Crown Point Iron Co. v. Aetna Ins. Co., 127 N.Y. 608, 28 N.E. 653 (1891) .

(n19)Footnote 19. In Dunlop v. Higgins, 1 H.L.Cas. 381 (1848), Dunlop wrote from Glasgow offering to sell 2,000 tons of pig iron. Higgins mailed an acceptance at Liverpool on January 30, saying: ''We have accepted your offer unconditionally; but we hope you will accede to our request as to delivery and mode of payment by two months' bill.'' This letter was misdated ''January 31;'' and because of delay in the mails it was not received in Glasgow until February 1. An acceptance on January 31 would in fact have been too late. It was held that a contract was made.

20. See note 20 on page 445.

(n20)Footnote 20.

U.S. - Barnebey v. Barron G. Collier, Inc., 65 F.2d 864 (8th Cir.1933) .

Ga. - E. Frederics, Inc. v. Felton Beauty Supply Co., 58 Ga.App. 320, 198 S.E. 324 (1938) .

Mo. - Egger v. Nesbit, 122 Mo. 667, 27 S.W. 385 (1894) .

Neb. - Corcoran v. Leon's Inc., 126 Neb. 149, 252 N.W. 819 (1934) .

N.Y. - Vassar v. Camp, 11 N.Y. 441 (1854) .

Eng. -Household Fire & C. Acc. Ins. Co. v. Grant, 4 Ex.D. 216 (1879).

In the last case supra, Lord Justice Bramwell vigorously dissented, but mainly he begged the question by assuming that communication means receipt and that all notices alike must be communicated. The question is not one that can be decided by deductive logic. It is one of policy and practical convenience.

(n21)Footnote 21. This provision, of course, does not effect acceptances that are properly made by performance rather than by promise. See Article 18(3) of the Convention.

(n22)Footnote 22. See John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention PP 157-163.

(n23)Footnote 23.

Ariz. - Salt River Project Agr. Improvement and Power Dist. v. Department of Economic Secur., 156 Ariz. 155, 750 P.2d 913 (App.1988) . An employer's petition for review of an unemployment compensation board decision was not timely filed when it was mailed in a timely manner, but to the wrong address.

N.J. - Potts v. Whitehead, 20 N.J.Eq. 55 (1869) .

Ericksson v. Cartan Travel Bureau, Inc., 109 F.Supp. 315 (D.Md.1953) .