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.
11 Carter v. Hibbard (Ky.), 83 S. W. 112, 26 Ky. Law Rep. 1033; Farmers' Produce Company v. Schreiner, 48 Okla. 488, L. R. A. 1916A, 1297 [sub nomine: Farmers' Produce Co. v. McAlester Storage & Commission Co., 150 Ac. 483].
12 McDonald v. Chemical National Bank, 174 U. S. 610, 43 L. ed. 1106.
13 Northwestern Mutual Life Ins. Co. T. Joseph (Ky.), 12 L. R. A. (N.S.) 439, 103 S. W. 317.
14 Bruner v. Moore (1904), 1 Ch. 305.
16 Henthorn v. Fraser (1892), 2 Ch. 27.
17 Notice of protest by mail has been said to be improper as between parties who live in the same city, within the meaning of the foregoing rules: Benedict v. Schmieg, 13 Wash. 476, 52 Am. St. Rep. 61, 36 L. R. A. 703, 43 Pao. 374.
In some cases it is suggested that the reason for holding that a contract takes effect when the letter of acceptance is mailed, is that the offeree has put the letter of acceptance out of his power as soon as he has mailed it; and that since his acceptance is now irrevocable as to the offeree, it should be binding on the offeror.18 If this is the true reason, the question is then raised as to the effect of postal regulations which permit the sendor of a letter to intercept it in compliance with such regulations. Where no attempt was made to intercept the letter, it was said that such postal regu-lations could not alter the recognized rule that the transaction is completed when the letter, which is intended to complete it, is mailed.19 In another case in which the letter of acceptance was actually reclaimed, it was mailed, not to the agent of the offeror who had sent the offer on behalf of his principal, but to another agent of the offeror with whom the offeree had had no correspondence, and who did not expect, as far as the record shows, any communication from the offeree. In this case, which was an action by an agent of the offeror against the offeror to recover a commission from the offeror for making a contract on his behalf with the offeree, it was held that the recall of such letter of acceptance before it was received by the agent to whom it was addressed, prevented the existence of a contract.20 "Whether the recall of a letter directed to the offeror with whom the offeree had been in correspondence would prevent the contract from existing, can not be regarded as decided in this case. The English courts seem to assume that, if the sender of a letter may intercept it in accordance with postal regulations, the contract is not completed when the letter of acceptance is mailed.21 A telegram may be recalled by the sender. If the true reason for the rule is that the acceptance has passed beyond the control of the offeree, acceptance by telegraph should then take effect only from the time that it was actually received by the offeror. The courts, however, hold that wherever acceptance by telegraph is proper, it dates from the filing of the telegram of acceptance for transmission.22
18 Brogden v. Metropolitan Ry. Co., 2 App. Cas. 666.
19 McDonald v. Chemical National Bank, 174 U. S. 610, 43 L. ed. 1106. (This statement was made in a case in which mailing checks and drafts as payment was held to pass title to the sendee before they were received.)
20 Scottish-American Mortgage Co. v. Davis, 96 Tex. 504, 97 Am. St. Rep. 932, 74 S. W. 17.
21 Ex parte Cote, L. R. 9 Ch. App. 27.
22 Weld v. Victory Manufacturing Co., 205 Fed. 770.
The rule that in cases in which the mail or telegraph is the proper method of communicating acceptance, the contract is made as soon as the letter of acceptance is mailed or the telegram of acceptance is filed for transmission, may be supported upon the ground that under modern business methods an offer which is to be accepted by an offeree who is not in personal communication with the offeror is in legal effect an offer to be accepted by performing an act which is at the same time the making of a promise; namely, mailing a letter of acceptance or filing a telegram of acceptance with a telegraph company.23 The fact is that in cases of this sort the parties expect that the letter of acceptance, when duly mailed will be duly transmitted; and they do not contemplate the consequences of the delay or loss of such letter. If they did, they ordinarily would make some specific provision therefor. In the absence of any expression of intention, the courts must assume either an intention to complete the contract when the letter of acceptance is mailed, or when the letter of acceptance is received. Either rule would give fairly satisfactory results. The important thing is to have a definite rule so that the rights of the parties can be ascertained in advance; and so that the offeror can avoid such liability by the express terms of his offer if he wishes to do so. In many cases, however, the rule is laid down as well settled without much regard to the reasons which underlie it.
The means by which the offeror has communicated his offer may be considered in determining the means to be used to communicate acceptance, whichever reason for the doctrine of acceptance by mail we may take as the correct one, although the different reasons will produce different results if applied logically. An offer by telegraph may be accepted by telegraph.24 It has been said in obiter that if an offer is made by telegraph, a letter of acceptance completes the contract as soon as it is mailed.25 Whether an offer by telegraph fairly contemplates an acceptance by letter has been said to be a question of fact as to which the finding of the trial court will not be reviewed.26 If such order by telegraph fairly contemplates an acceptance by letter, the contract is complete when such acceptance is mailed.27 If the custom of the business at that place is to accept telegraphic orders by telegraph acceptance by mail is not proper, and the offeror may revoke his offer, or possibly may treat it as having lapsed.28 An offer by mail may be accepted by telegraph.29 It has been held, however, that if an offer is made by letter, acceptance by telegram does not complete the contract until the telegram is received, at least;30 since the offeror has "done nothing to indicate his willingness to adopt such agency."31 It would appear that if any distinction were to be made a telegraphic acceptance of an offer by letter might be held to be sufficient, while an acceptance by letter of an offer sent by telegraph would be prima facie insufficient. An offer by telegraph implies that the offeror wishes prompt action and that he does not wish to wait for the slower means of communication by mail. It is true, however, that an offer by letter may indicate that the offeror wishes an acceptance by letter so that he may have written evidence of such contract; and may not be exposed to the difficulties of proving a contract by telegraph. This latter reason does not seem to have been considered by the courts.
23 Henthorn v. Fraser (1892), 2 Ch. 27.
24 Williams v. Burdick, 63 Or. 41, 125 Ac. 844 (rehearing denied, Williams v. Burdick, 63 Or. 41 at 49, 126 Ac. 603).
25 Phenix Ins. Co. v. Schultz, 80 Fed. 337, 25 C. C. A. 453.
26 Farmers' Produce Co. v. Schreiner, 48 Okla. 488, L. R. A. 1916A, 1297 [sub nomine: Farmers' Produce Co. v. McAlester Storage & Commission Co., 150 Ac. 483].