Adams and Others v Lindsell and Others (1818)

When parties contract by letter, there is always a gap between the posting of an acceptance and its arrival. Who bears the risk of that gap? Adams v Lindsell is the case that answered it: the contract is complete when the acceptance is sent, not when the offeror receives it. It is the foundation of the postal rule, and it is the starting point for understanding how s. 4 of the Indian Contract Act 1872 deals with communication of acceptance.

The report is short — a few paragraphs — so you can and should know its reasoning precisely.

The defendants were wool dealers at St. Ives, Huntingdonshire. On Tuesday 2 September 1817 they wrote to the plaintiffs, woollen manufacturers at Bromsgrove, Worcestershire, offering "eight hundred tods of wether fleeces, of a good fair quality of our country wool, at 35s. 6d. per tod", "receiving your answer in course of post."

The defendants misdirected the letter to Bromsgrove, Leicestershire. As a result it reached the plaintiffs only at 7 p.m. on Friday 5 September. That same evening the plaintiffs wrote accepting the offer. The post ran through London, so the acceptance reached the defendants only on Tuesday 9 September.

Had the offer not been misdirected, the defendants would have expected an answer on Sunday 7 September. Not receiving one, they sold the wool to someone else on Monday 8 September — after the acceptance had been posted, but before it arrived.

The plaintiffs sued for non-delivery. At the Worcester assizes, Burrough J directed that, since the delay was caused by the defendants' own neglect, the jury must take it that the answer came back in due course of post. The plaintiffs got a verdict. The defendants obtained a rule nisi for a new trial, arguing there was no binding contract.

1. Is a contract made by post complete when the acceptance is posted, or only when it is received by the offeror?
2. Could the defendants escape liability by selling the wool after acceptance had been posted but before it reached them?
3. Who bears the consequences of the delay caused by the misdirected offer?

For the defendants: relying on Payne v Cave and Cooke v Oxley, they argued that "Till the plaintiffs' answer was actually received, there could be no binding contract between the parties; and before then, the defendants had retracted their offer, by selling the wool to other persons."

For the plaintiffs: at the moment the plaintiffs accepted the offer, the defendants became bound — and that was on the Friday evening, when there had been no change of circumstances.

Rule discharged — the verdict for the plaintiffs stood. There was a binding contract, and the defendants were liable for failing to deliver the wool.

Why receipt cannot be the test

The Court rejected the defendants' argument by showing where it leads: "if that were so, no contract could ever be completed by the post." If the offeror were not bound until he received the acceptance, then the acceptor, by the same logic, should not be bound until he knew his acceptance had been received and assented to — "And so it might go on ad infinitum."

The continuing offer

The Court's solution was to treat the offer as continuing throughout its journey: "The defendants must be considered in law as making, during every instant of the time their letter was travelling, the same identical offer to the plaintiffs; and then the contract is completed by the acceptance of it by the latter." The contract was therefore complete on the Friday evening when the plaintiffs accepted, before the defendants sold the wool on Monday.

The delay was the defendants' fault

On the delay, the Court held that it "arises entirely from the mistake of the defendants, and it therefore must be taken as against them, that the plaintiffs' answer was received in course of post." The defendants could not rely on a lateness they themselves had caused.

Where an offer is made by post, it is treated as being made continuously while the letter travels, and the contract is completed by the offeree's acceptance of it; the offeror cannot insist that no contract exists until the acceptance reaches him, since that reasoning would make contracting by post impossible. An offeror who causes delay in the offer's arrival (here, by misdirecting it) must bear the consequences, and the acceptance is treated as having returned in due course of post.

• Direct question: When is a contract concluded when parties communicate by post? Discuss with reference to s. 4 of the Indian Contract Act 1872. Begin with Adams v Lindsell (the continuing offer; the ad infinitum argument), then explain how s. 4 treats communication of acceptance, and link it to Bhagwandas Goverdhandas Kedia v Girdharilal Parshottamdas (1966), where the postal rule is discussed.
• Problem question: A posts an offer; B posts an acceptance; before it arrives A sells the goods elsewhere. Apply Adams v Lindsell: the contract was complete on B's acceptance, and A is liable.
• Short note: The postal rule — give the facts (misdirected letter, Friday acceptance, Monday sale, Tuesday receipt) and the Court's reasoning in its own words.
• Remember to say it is an English King's Bench decision of 1818 — persuasive in India, not binding.