Dunlop v Higgins [1848]

Court: House of Lords

Facts: Dunlop & Company sent an offer by post on 28 January 1845 to sell 2,000 tons of pig-iron at a specified price. Higgins received the offer on 30 January 1845 and posted a letter of acceptance on the same day. However, due to postal delays, Dunlop received Higgins's acceptance letter on 1 February 1845. By then, the price of pig-iron had increased, and Dunlop sought to retract the offer, arguing that no binding contract existed due to the delay in acceptance.

Issue: Whether a binding contract was formed despite the delay in the acceptance letter’s arrival.

Held: The House of Lords held that a binding contract was indeed formed. The court affirmed the application of the postal rule, which stipulates that an acceptance is effective when the letter is posted, not when it is received. Consequently, Dunlop could not retract the offer based on the postal delay.

Key Judicial Statement: The court reasoned that the defendant (Dunlop) could not be held responsible for delays in the postal service. Lord Brougham stated, “The mere fact of delay in the delivery of a letter does not prevent the contract from being concluded once the letter is posted.”

💡Leveluplaw: Dunlop v Higgins reinforces the postal rule established in Adams v Lindsell, affirming that acceptance by post is effective upon posting rather than receipt. This principle ensures that the act of posting an acceptance creates a binding contract, even if postal delays occur. The case underscores the importance of considering the postal rule in contract formation and provides clarity that delays in postal communication do not invalidate a contract if the acceptance was duly posted.