Household Fire Insurance v Grant [1879] 4 Ex D 216

• Defendant offered to buy some of Plaintiff’s shares and, in acceptance of this, Plaintiff posted Defendant a certificate of the shares, which Defendant never actually received. Because he never received it, he claimed there was no contract and thus he wasn’t bound by the company’s terms or conditions.

• The CA found that where Defendant allows Plaintiff’s acceptance to be posted, the contract has force from the moment when the acceptance is posted, even if it is delayed or never reaches Defendant. This was because it was not Plaintiff’s fault if the post office made a mistake and precedent supports this.

• He reconciles this with the requirement of contract law that there must be a meeting of the minds through mutual communication by saying that the Post Office is the agent of both parties. Thus once the acceptance is with the post office, the contract has effect.

• It is not inconvenient since an offeror can always put a clause in his offer that says that he will only acknowledge acceptance once it has been physically communicated to him.

  • Though this is fair to the offeree, it is harsh on the offeror - it is no more his fault that the post office should be inefficient than anyone else’s. 

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