- Created by: Former Member
- Created on: 03-12-19 19:54
On 19 October 1971, the claimants were granted an option by the defendant 'exercisable by notice in writing to [the defendant] at any time within six months from the date hereof'. On 14 April 1972, the claimants wrote to the defendant, giving notice of the exercise of the option, but the letter did not arrive. The claimants sought specific performance of the option agreement, arguing that it was complete on 14 April when the acceptance was posted.
Held: The option had not been validly exercised because actual communication was required.
RUSSELL LJ: It is the law in the first place that, prima facie, acceptance of an offer must be communicated to the offeror. Upon this principle the law has engrafted a doctrine that, if in any given case the true view is that the parties contemplated that the postal service might be used for the purpose of forwarding an acceptance of the offer, committal of the acceptance in a regular manner to the postal (p. 51) service will be acceptance of the offer so as to constitute a contract, even if the letter goes astray and is lost.
Nor, as was once suggested, are such cases limited to cases in which the offer has been made by post. It suffices I think at this stage to refer to Henthorn v Fraser  2 Ch 27. In the present case, as I read a passage in the judgment below ..., Templeman J concluded that the parties here contemplated that the postal service might be used to communicate acceptance of the offer (by exercise of the option); and I agree with that.
But that is not and cannot be the end of the matter. In any case, before one can find that the basic principle of the need for communication of acceptance to the offeror is displaced by this artificial concept of communication by the act of posting, it is necessary that the offer is in its terms consistent with such displacement and not one which by its terms points rather in the direction of actual communication ...
The relevant language here is, 'The said option shall be exercisable by notice in writing to the intending vendor ...', a very common phrase in an option…