Thursday, 20 December 2012

You've got mail: the postal acceptance rule and Scots law

Twenty years ago, the Scottish Law Commission was considering the provisions of The United Nations Convention on Contracts for the International Sale of Goods, which even then was over a decade old. It explained that the Convention contained “a modern, internationally agreed set of rules on the formation of certain contracts”, had been “prepared by experts on contract law from many countries...[that it was], to some extent, an amalgam of civil law and common law traditions [and that perhaps].. for this reason its rules are very similar to the existing rules of Scottish law.

It noted too:

Scots law has a tradition of being receptive to the best international legal developments, given the obvious advantages for Scottish traders, lawyers and arbiters in having our internal law the same as the law which is now widely applied throughout the world in relation to contracts for the international sale of goods, and...the sensible tradition in Scotland of not having different rules for the formation of contracts of different types”.

One of the issues exercising the Commission was the postal acceptance rule: “the special rule whereby, contrary to the general rule that an acceptance is effective when it is communicated to the offeror, a postal acceptance becomes effective when the letter is posted.

The rule is an old one: Thomson v James (1855) 18 D 1; Jacobsen, Sons & Co v Underwood & Son Ltd (1894) 21 R 654. But it had become a controversial one and the Commission was considering it in the context of its abolition which it noted “would, in our view, be a good thing.” After all, the rule did seem, even then, out of line with the expectations of the lay businessman who might:

be somewhat surprised to learn that … it is the present law that an offer stated to be open for acceptance until 5 pm on Friday can be validly accepted by a letter arriving at 10 o'clock on the following Monday morning.