So I've been hard at work gentle readers over the last few weeks on the LLB. Actually, I had a good session the other night with some other students on contract law of all things. Have a look at the attached and let me know your thoughts:
On Monday, Albert inspected Betty’s car at her house in Woking and offered to pay £10,000 for it. Betty wanted £12,000. Later in the day, Betty wrote to Albert and stated that she would take £11,000. The letter was received by Albert at his home on Tuesday morning. At 4.00 pm on Tuesday afternoon, Albert at his office in London wrote a letter to Betty accepting her offer. On his way to post the letter Albert met Cuthbert who told him, ‘I gather that Betty has finally sold her car.’ Betty had, indeed, sold the car. Albert posted his letter and, upon arriving home at Woking, discovered a message on his answer phone from Betty. The message had been left at 3.00 pm; Betty had stated, ‘I withdraw my offer.’ Albert bought a similar car for £12,500. Advise Albert.
In the situation above, Albert is £1,500 worse off due to the actions of Betty. The question is whether Betty could reasonably withdraw her offer in the manner in which she did or was there a binding contact between the two of them for Albert to buy Betty’s car for £11,000?
Albert’s case rests upon the strength of the postal rule as first established in Adams v Lindsell (1818) and Household Fire Insurance v Grant (1879). Under this exceptional rule, acceptance of an offer is completed when it is posted. This Albert did during the course of Tuesday afternoon sometime after 4pm. As seen in Quenerduaine v Cole (1883), it was reasonable for Albert to rely on the postal means of communication despite its old-fashioned nature, due to the previous letter which Betty wrote to him offering to sell her car. Thus the use of the post was reasonably contemplated by the parties.
Albert will have to contend against Betty’s claim that he knew the car was sold because he was informed by Cuthbert. While Albert did hear from Cuthbert that the car might have already been sold, this was no more than hearsay as there is no supposition that Cuthbert was reliable and authorized to communicate for Betty as set out in Dickinson v Dodds (1876). In advising Albert it should be clearly necessary to review with him if Cuthbert ever said that he was acting for Betty by telling him this information. If not, it could be reasonably disregarded.
Perhaps the most difficult point for Albert to contend with is that there is little clarity on what to make of Betty’s withdrawal of her offer on a voice mail message at 3pm. Albert would need to reasonably argue that voice mail does not fall under the postal rule exception to communication, thus it is valid when received. As
Albert’s posting of the acceptance to Betty’s offer was prior to receiving the notice of her revocation then the postal rule should apply and Albert should have a reasonable claim for £1,500 compensation.