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.
Under what circumstances the mail or telegraph is a proper means of communication so as to bind the parties at the moment that acceptance is mailed, is a question on which the courts have expressed different opinions in assigning reasons for their decisions; though the actual conflict in decisions has been slight. The courts which have agreed in holding that the mailing of the acceptance completes the contract, have not agreed as to the reason therefor. The theory of agency has been invoked; and it has been suggested that the mail is to be regarded as the common agent of the offeror and of the offeree.1 If this is the correct theory, no reason appears for charging the consequences of the delay or loss of the letter of acceptance to the offeror alone; but this is the actual result of holding that the postoffice is the agent of both parties, and that the contract is completed when the acceptance is mailed. It has also been suggested that the postoffice is the agent of the offeror, and accordingly that a delivery to the postoffice is in effect a delivery to the offeror.2 The difficulty with this explanation is that it is a sheer fiction. Agency implies authorization and control, and in cases of this sort we have neither. The suggestion that the telegraph company is the agent of the offeror is more plausible.3 Where the explanation of agency is resorted to, it is sometimes suggested that the offeror makes the postoffice his agent by sending the offer by mail.4 In many of the cases, the original offer was, in fact, made by mail or telegraph and considerable stress was laid on that fact as indicating that such means of acceptance was proper, the mail being said to be the offeror's agent to deliver the offer and receive the acceptance.5 If A mails to B a deed to be executed by B and then mailed to A, such deed is delivered at the time that B mails it to A after it is executed.6 But mailing the letter has been held to complete the contract where the original offer was not made by mail, and where this theory of agency can not be invoked.7 The courts have held it proper to accept by letter or telegraph so as to make the mailing of the acceptance complete the contract in cases where the party making the offer contemplated a final acceptance or refusal at a time when the parties were not in personal communication, even though the mail was not used in the first instance by the offeror.8 Acceptance by mail is said to be proper wherever the parties are to be "at a distance when the offer is to be accepted, unless the offer itself shows a contrary intention.9 An analogy to this may be suggested in the rule that where notice may be given by mail, such as notice of the dishonor of negotiable instruments,10 such notice is effective when duly mailed.
4 Postal Telegraph-Cable Co. v. Louisville Cotton Seed Oil Co., 140 Ky. 506, 131 S. W. 277.
5 Postal Telegraph-Cable Co. v. Louisville Cotton Seed Oil Co., 140 Ky. 506, 131 S. W. 277.
6 Scottish-American Mortgage Co. v. Davis, 96 Tex. 504, 97 Am. St. Rep. 932, 74 S. W. 17. (At least if B recalls such letter before it reaches Y, no contract between A and B exists, and Y can not recover his commission from A.)
2 Averill v. Hedge, 12 Conn. 424.
3 Lucas v. Western Union Telegraph Co., 131 la. 669, 6 L. R. A. (N.S.) 1016, 109 N. W. 191; Williams v. Burdick, 63 Or. 41, 125 Ac. 844 [rehearing denied, Williams v. Burdick, 63 Or. 41 at 49, 126 Ac. 603].
4 Lucas v. Western Union Telegraph Co., 131 la. 669, 6 L. R. A. (N.S.) 1016, 109 N. W. 191.
5 England. Household Fire and Carriage Accident Co. v. Grant, L. R. 4 Ex. Div. 216.
United States. Patrick v. Bowman, 149 U. S. 411, 37 L. ed. 790.
Iowa. Moore v. Pierson, 6 la. 279, 71 Am. Dec. 409.
Maryland. Wheat v. Cross, 31 Md. 99, 1 Am. Rep. 28.
New Hampshire. Busher v. New York Life Ins. Co., 72 N. H. 551, 58 Atl. 41.
Vermont. Hartford, etc., Co. v. Lasher, etc., Co., 66 Vt. 439, 44 Am. St. Rep. 859, 29 Atl. 629.
6 Johnson v. Sharp, 31 O. S. 611.
7 Henthorn v. Fraser (1892), 2 Ch.
27; Bruner v. Moore (1904), 1 Ch. 305; Northwestern Mutual Life Ins. Co. v. Joseph (Ky.), 12 L. R. A. (N.S.) 439, 103 S. W. 317.
8 Carter v. Hibbard (Ky.), 83 S. W. 112, 26 Ky. Law Rep. 1033; Wilcox v. Cline, 70 Mich. 517, 38 N. W. 555.
9 Farmers' Produce Co. v. Schreiner, 48 Okla. 488, L. R. A. 1916A, 1297 [sub nomine: Farmers' Produce Co. v. Mc-Alester Storage & Commission Co., 150 Ac. 4831.
10 As under the negotiable instrument act: First National Bank v. Star Watch Case Co., 187 Mich. 224, 153 N. W. 722; Zollner v. Moffitt, 222 Pa. St. 644, 72 Atl. 285; First National Bank v. Delone, 254 Pa. St. 409, 98 Atl. 1042; Board of Education v. Angel, 75 W. Va. 747, 84 S. E. 747.
If the parties live in different cities, acceptance by mail is proper.11 If it is the custom between parties in different cities, who have mutual business relations to endorse and mail drafts and checks to each other, such drafts and checks belong to the sendee as soon as they are mailed, and a subsequent act of bankruptcy on the part of the sender after they are mailed and before they are received, does not defeat the sendee's right.12 If the insured, who lived in a city other than that in which the office of the insurance company was located, has the right to elect between certain options under his policy, his election is complete when he has mailed it; and if he dies before the letter is received, such election is, nevertheless, valid.13 If the parties are domiciled in the same city, but both understand that one or the other is to be absent therefrom when the offer is to be accepted, the mail is a proper means of communication.14 If an offer, by its terms, is to remain open for a specified time, and the parties expect to be in different places during the greater part or all of such time, an acceptance of such offer by a telegram which is sent to the temporary address given by the offeror, which is transmitted duly and which is not received in time by the offeror because the offeror has left the temporary address thus given, without giving the offeree any other address at which the offeror could be reached during the remaining time for which such offer is to be open, completes the contract, even if the parties were domiciled in the same city.15 If the parties live in towns which join closely, one of them being a suburb of the other, the mail has been looked upon as a proper means of communication.16 Whether the mail is a proper means of communication where the parties live in the same city, the size of which makes communication by mail customary among persons who do business in such city, is a question upon which authority seems to be lacking..17