Mailbox Rule

Whenever someone starts throwing legal jargon at me - contract, litigation, attorney, it totally freaks me out! But I will have to eventually stop freaking out as I know that law and legal affairs are something that you can never escape entirely in your life. Especially if you venture into a business or are involved in legal contracts through a company and of course I need not mention about those who are practicing law. Nevertheless, to deal with my phobia of law, I tried to read some law related text and I came across this contract law and some nuances within it. One of the really interesting things I found within the contract law was the mailbox rule or posting rule. In case you do not have a phobia of law, you may be interested in reading what is coming up.

Basis of Mail Box Rule
Primarily it seems that the genesis of the posting rule is the offer and acceptance analysis, a traditional approach used in contract law. It is used to determine if a partnership agreement has been made between 2 parties. An agreement mainly comprises an offer by an indication of one person to another person. This is just an indication of the willingness of the person offering to get into a contract on specific terms without further negotiations. This offer and acceptance formula defines the moment of formation when the parties have agreed on a contract. This is a classical approach to forming a contract. The mailbox rule takes it ahead from this point.

What is the Mailbox Rule
Now, this rule in contract law is actually slightly contradictory to the general rule of contract law observed in most countries. Under the general rule of contract law which is widely accepted in maximum countries is that acceptance of a contract is affirmed when the agreement is communicated. This rule, simply put, states that if A and B decide to get into a legal contract and if they decide to communicate by mail, as soon as the confirmed reply is posted, from that point, the offer is said to be accepted. Of course this is valid as long as mailing is held by both parties as a reasonable form of reply. Apart from proper legal contract, this rule applies to payment of insurance premium in some cases. When the individual offering or initiating the contract chooses the postal service as an implied agent, the receipt of acceptance provided by the post is considered to be that of the person being offered the contract.

Implications and Variations of the Mailbox Rule
Let me warn you that this is going to be a tad bit confusing, but I will try to make it as simple as I can. Let's take an example from English case law for the mailbox rule. It goes like this -

• Jack makes an offer to Jill - Day 1
• Jill wants to reject the offer by posting a contract cancellation letter in the mail to Jack saying that she is rejecting the offer - Day 2
• Now a complication arises and Jill overturns her decision to reject the offer and sends a fax to Jack saying she is accepting the offer - Day 3

Now if there is such an ambiguous situation, whichever communication is with Jack first will be held valid. In this scenario if Jill's letter of acceptance does not reach Jack before the rejection, it is going to be her bad luck. On the whole, the implications depend on whichever communication reaches the person putting across a contract.

This is what the mailbox rule is all about and what happens in case the person being offered the contract accepts or rejects it or even changes the decision. Although this is termed as the posting or mailbox rule, as with changing times and technological advancement, this rule has been modified to encompass all the possible modes of communication, with which commercial or business communication can be fairly conducted. This is where I close this article and say adios till next time!