Holwell Securities Ltd v Hughes
| Holwell Securities Ltd v Hughes | |
|---|---|
 |
|
| Decided | 1974 |
| Citation(s) | [1974] 1 WLR 155, [1974] 1 All E.R. 161 (C.A.) |
| Keywords | |
| Offer and acceptance, postal rule | |
Holwell Securities Ltd v Hughes [1974] 1 WLR 155 is an English contract case overriding the usual postal rule. Ordinarily, a contractual offer can be deemed to be accepted when it leaves the offeree and enters the postal system.
In this case, the original offer clearly stipulated the method by which acceptance was to take place, and this superseded the postal rule.
Facts
The defendant issued a grant to sell a property at 571 High Road, Wembley. It contained a clause stipulating that there must be notice (here, receipt of the offer) in writing within six months in order to exercise the option. The claimants sent a letter exercising the option. It was lost in the mail and was never received by the defendant.
Judgment
The postal acceptance rule does not apply in every case, even if the parties involved consider the post to be an acceptable means of communication.
Lawton LJ asserted that in the law relating to options, the grantee (here, the plaintiff) must comply strictly with the conditions stipulated for exercise by the offeror (the defendant in this case). Following this reasoning, the postal acceptance rule cannot apply when there are express terms in the offer specifying that acceptance must reach the offeror. The Court also advances that the rule ought not to apply in cases where its application would produce manifest inconvenience and absurdity. More broadly, the Court states that the rule does not apply if when looking at all the circumstances, it is apparent that the parties could not have intended a binding agreement until notice of acceptance was communicated to the offeror.
Russell LJ added that although the parties had a telephone conversation, this does not constitute the requisite notice of acceptance as laid out in the offer.
Significance
This case sets a precedent for overriding the postal rule.
