This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The rule that acceptance by mail dates from the time of mailing applies only to cases in which the letter of acceptance is mailed by the offeree or his authorized agent to the offeror or his authorized agent. If an offer is made by mail, and the offeree mails instructions to his own agent to accept such offer, the contract takes effect when such agent notifies the offeror of such acceptance, and not when the offeree gives such instructions to his agent.1 If an insurance company offers a policy to A through A's agent, and A notifies his agent to accept such policy and to pay the premium, the contract between A and the insurance company does not take effect when A mails such instructions to such agent; and if loss occurs before the agent notifies the insurance company that A accepts, the insurance company may withdraw such offer.2 If a policy is mailed to the agent of the insurance company, the act of mailing is not of itself an acceptance.3 If A, a broker, notifies B that he can make a sale for B on certain terms on B's "firm offer," B's telegram to A instructing A to make such sale and asking him to name the purchaser, does not complete a contract between the seller and the prospective purchaser; and if the offer of C, the prospective purchaser, to A called for acceptance by a certain time, no contract existed unless acceptance was made in such period of time.4 Accordingly, if B's telegram is delayed in transmission, B has no contract with either A or C; and accordingly B has a right of action against the telegraph company.5 If X, as agent for A, makes an offer to B, and B mails a letter of acceptance to Y as another agent of A, it has been suggested that the ordinary rule as to acceptance by mail does not apply.6
2 Knights of Maccabees v. Sackett, 34 Mont. 357, 115 Am. St. Rep. 532, 86 Ac. 423.
3 Knights of Maccabees v. Sackett, 34 Mont. 357, 115 Am. St. Rep. 532, 86 Ac. 423.
4 Eliason v. Henshaw, 17 U. S. (4 Wheat.) 225, 4 L. ed. 556.
5 Eliason v. Henshaw, 17 U. S. (4 Wheat.) 225, 4 L. ed. 556. (The acceptance was mailed to the one of the two business addresses of the offeror which was not named by him as the one to which to send the answer by the messenger, and he did not receive it for several days after he would have received it if it had been sent by messenger.)
1 New v. Germania Fire Ins. Co., 171 Ind. 33, 85 N. E. 703.
2 New v. Germania Fire Ins. Co., 171 Ind. 33, 85 N. E. 703.
3 Busher v. New York Life Ins. Co., 72 N. H. 551, 58 Atl. 41.