The question
On 1 March, Priya writes to Tom offering to sell him her printing press for £5,000 and asks him to reply by post. Tom posts a letter of acceptance on 3 March. The letter is delayed and reaches Priya on 8 March. On 5 March, Priya posts a letter revoking her offer, which Tom receives on 6 March.
Which of the following is the best answer?
Show the answer and explanation
The best answer is E: A contract was formed on 3 March, when Tom posted his acceptance.
Where acceptance by post is reasonably contemplated, the postal rule applies: acceptance takes effect when the letter is properly posted (Adams v Lindsell (1818)), even if it is delayed or lost (Household Fire Insurance Co v Grant (1879)). A revocation, by contrast, only takes effect when it actually reaches the offeree (Byrne v Van Tienhoven (1880)).
Tom's acceptance was effective on 3 March, before Priya's revocation reached him on 6 March, so the contract was formed on 3 March. Options A, D and B wrongly let a later revocation undo a completed contract. Option C applies the general rule that acceptance must be received, which the postal rule displaces here.