Henthorn v Fraser [1892]

Court: Court of Appeal

Facts: The defendant (Fraser) offered the claimant (Henthorn) an option to purchase certain properties within 14 days. On the day after making the offer, Fraser decided to withdraw it and posted a revocation letter. However, the revocation letter reached Henthorn only after 5:00 pm. Unaware of the withdrawal, Henthorn posted an acceptance letter the same day. The acceptance letter was received by Fraser's office after it had closed, and was opened the following morning.

Issue: Whether a binding contract was formed when Henthorn posted the acceptance letter before receiving the revocation notice.

Held: The Court of Appeal held that a binding contract existed. The postal rule was affirmed, meaning that acceptance is effective when posted, even if the acceptance letter arrives after the withdrawal letter. Lord Herschell emphasized that the postal rule applies if it is reasonable for the offeror to expect that acceptance might be communicated by post.

Key Judicial Statement: Lord Herschell stated, “Postal acceptance will be valid at the time of posting if it is reasonable for the offeror to expect an acceptance by post.” He noted that the fact that both parties were located in different towns supported the expectation that postal communication was a reasonable method for acceptance.

💡Leveluplaw: The case highlights the significance of considering the parties' reasonable expectations regarding communication methods, especially when they are in different locations. This reinforces the principle established in Adams v Lindsell and emphasizes that the postal rule helps maintain certainty in contract formation, ensuring that acceptance by post is valid as long as it was reasonably anticipated by the offeror.