Deveral Copps, New Law Journal, 13 June 2003
Reproduced by permission of Reed Elsevier (UK) Ltd. trading as LexisNexis UK.
There are probably few people in the country that have not used email at some point in their lives and fewer who are ignorant of its existence-perhaps blissfully so. Email as a means of communication is now used more widely than the traditional postal system; to offer some guide as to its usage, it is estimated that over 550 million email messages were sent and received in January of last year alone (figures provided by Netvalue-http://uk.netvalue. com/presse/index_frame.htm?fichier⫽cp0082.htm). Of these emails a large proportion will have been sent between businesses and some, no doubt, will have been used to form contracts. This leads us to question the point at which the contract is created and whether acceptance takes effect from the time that the email is sent or from the time that it arrives. In other words, does the postal rule apply to email?
Over the years, various arguments for and against the application of the postal rule to email have been raised. The vast majority of these have either resulted in conclusions that email should have the benefit of the postal rule or that it is a grey area which should be left to the courts to decide, thereby leaving this issue resting firmly on the fence. Before exam- ining the arguments that have been advanced to allow email to benefit from the postal rule, it is worthwhile reviewing why the postal rule was created in the first place.
The postal rule was established in Adams v Lindsell (1818) 1 B & Aid 680, to pro- mote certainty within contractual formation at a time when the principal method of communication – the postal service – was slow. Had there been some alternatives to the postal service at the time, it is doubtful whether an exception to the normal rules of com- munication of acceptance would have been necessary. However, the postal rule was created almost 20 years before the telegraph system became practically useful in 1837 and some 60 years before Alexander Graham Bell made the first telephone call in 1876.
So without the postal rule, contracting parties who posted letters of acceptance would have been unsure whether their acceptances had been successful. Of course the law could have required some positive notification of the receipt of the acceptance from the offeror, although it would follow that if notification of the receipt of acceptance was required, then this too would need to be communicated to ensure that the parties knew that they were legally bound. It would have been ludicrous for such a situation to occur; creating contracts by post would have been a lengthy process and this would have unnecessarily hampered business transactions. Parties may have had resources tied up in readiness for agreements
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that would not have been created and would miss out on alternative business opportunities for fear of being in breach of contract. In short, the postal rule ensures the swift conclu- sion of an agreement, in that contracts are created when the letter of acceptance is posted.
Should the postal rule apply to email?
It is well-established that the postal rule does not apply to instantaneous forms of com- munication ( Brinkibon Ltd v Stahag Stahl und Stahlwarenhandels GmbH [1983] 2 AC 34 confirmed the decision in Entores Ltd v Miles Far East Corp [1955] 2 QB 327 ). Email, whilst undoubtedly swift and certainly far quicker than the traditional postal service, cannot be said to be instantaneous as hours and even days can elapse between the sending of a message and its receipt. As the postal rule applies to non-instantaneous methods of com- munication, including telegrams (Bruner v Moore [1904] 1 Ch 305) this would certainly sup- port a claim for the extension of the postal rule to electronic mail.
A further argument which supports the application of the postal rule to email relates to control. Once a letter has been posted the responsibility of delivery lies with the post office and is outside the control of the sender. As the law appears to favour the person who ‘trusts the post’ (Household Fire Insurance Co Ltd v Grant (1879) 4 Ex D 216, 223) the same prin- ciple should apply to email, as once an email is dispatched the sender has no control over ensuring that the email drops into the mailbox of the person to whom it was addressed.
The above certainly illustrates that there are some obvious similarities between email and post, however, this does not necessarily mean that the postal rule should be extended to email. The simple reason for this lies with the motive for the postal rule’s creation which was to create certainty in contractual formation at a time when the communication system involved unavoidable delay. Whilst email is not instantaneous, it is normally very quick and although there are occasional delays, these are rare and normally last less than a day.
Also, given that the post was the only form of distance communication available in the early 19th Century, it would have been difficult to check whether an acceptance had been successful. In the 21st Century, an offeree can easily check whether any emailed acceptance has been received, possibly using an instantaneous method of communication, such as the telephone or fax. If checking the success of an emailed acceptance by telephone or fax is not possible or undesirable, almost all email software allows for the request of ‘delivery’ and ‘read’ receipts at the time when an email is sent. Here, a ‘delivery’ receipt will inform the sender that an email has been successfully delivered to the addressee’s email account and a ‘read’ receipt will inform the sender that an email has been read. Essentially, these receipts allow the sender of an email to check that an email has been successfully transmitted and operates in a similar way to recorded delivery packages sent via the traditional postal service. In addition to delivery and read receipts, it is now standard for the sender of an email to be informed if an email is not delivered. This, for example, can occur when a mistake has been made in the recipient’s address or when the recipient’s email service provider is expe- riencing problems. If a message is returned, there would be few advocates of a rule that could allow a contract to be created when the offeree knows that acceptance has definitely not been communicated! As it is now possible to confirm whether or not an email has been successfully delivered, is there really a need to stretch the postal rule to encompass email?
The Government could have settled the email/postal rule argument in the recent Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013), but unfortunately, failed to do so. Interestingly, the Regulations clearly state the point at which an order – which although not absolute will tend to amount to an offer – is deemed to be communicated.
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Regulation 11(2)(b) states that where businesses contract, ‘the order and the acknowledge- ment of receipt will be deemed to be received when the parties to whom they are addressed are able to access them’. Where email is concerned therefore, this would be the time when the email drops into the mailbox of the person or business to whom it is addressed and not when the message is actually read.
Regulation 11(2)(b) makes reference to an ‘acknowledgment of receipt’, whereby a seller is required by Reg 11(1)(a) to ‘acknowledge receipt of the order … without undue delay and by electronic means’. It is worth pointing out that it is completely possible for a carelessly drafted acknowledgement of receipt to amount to an acceptance. For example, a company that acknowledges the receipt of an order with the words ‘thank you for your order, your goods should arrive within 4 –7 working days’ is intimating that they wish to fulfil their part of the contract and would find it difficult to convince a court that the offer had not been accepted. In this situation, Reg 11(2)(b) suggests that acceptance would be deemed com- municated at the time the email is available to be read, although this is probably not how this Regulation was meant to be interpreted.
In the United States, this interpretation can be seen in the Uniform Computer Information Transactions Act 2000 ( UCITA). Here, under the sectional subtitle of ‘offer and acceptance in general’, s 203(4) states ‘if an offer in an electronic message evokes an electronic message accepting the offer, a contract is formed … when an electronic accept- ance is received’. Receipt is defined in s 102 of UCITA as ‘coming into existence in an infor- mation processing system or at an address in that system in a form capable of being processed by or perceived from a system of that type by a recipient’. This again simply means that an emailed acceptance is deemed effective from the time that it is successfully delivered to a person’s mailbox, not when it is actually read.
Given the advances in communication systems since the postal rule was created, con- cluding that the postal rule does not apply to email would seem sensible. Stating that emailed acceptances are deemed effective from the moment that they drop into the recipi- ent’s mailbox would also be logical. It would, after all, occupy a convenient and reasonable middle ground between using a method of delivery over which the sender has no control and actual communication to the offeror.