Legal Definitions - mailbox rule

The Mailbox Rule is a principle in contract law that determines when an acceptance of an offer becomes legally effective. Generally, it states that an offer is considered accepted, and a binding contract is formed, the moment the acceptance is properly dispatched by the person receiving the offer (the "offeree"), rather than when it is actually received by the person who made the offer (the "offeror"). This rule typically applies when acceptance is communicated through a medium like postal mail, email, or fax, and the offer does not specify otherwise.

This rule is important because it establishes a clear point in time when a contract comes into existence, preventing uncertainty if communications are delayed or lost. Parties can, however, agree in their contract that acceptance will only be effective upon receipt by the offeror, thereby overriding the mailbox rule.

Here are some examples illustrating the Mailbox Rule:

• Scenario: Real Estate Offer

  Sarah offers to sell her house to David for $500,000, stating that he has until Friday to accept. On Thursday morning, David signs the purchase agreement and places it in the mail, addressed to Sarah. Later that afternoon, before Sarah receives David's letter, she gets a better offer from another buyer and tries to revoke her offer to David. Under the Mailbox Rule, a contract was formed between Sarah and David on Thursday morning when David mailed his acceptance. Sarah's attempt to revoke her offer later that day is ineffective because the acceptance was already legally binding once it was dispatched.

• Scenario: Business Supply Contract

  A manufacturing company, "Apex Supplies," emails a proposal to "Tech Innovations" for a bulk order of components at a specific price. The email states that Tech Innovations must accept by the end of the business day. At 4:30 PM, Tech Innovations' purchasing manager hits "send" on an email accepting the terms. Due to a server error, Apex Supplies does not receive the email until the following morning. Despite the delay in receipt, the Mailbox Rule dictates that Tech Innovations' acceptance was effective at 4:30 PM when the email was sent, forming a binding contract at that moment. Apex Supplies cannot claim the offer expired because they didn't receive it by the deadline.

• Scenario: Magazine Subscription

  A magazine publisher sends out promotional letters offering a discounted annual subscription. The letter includes a pre-paid return envelope for acceptance. Emily fills out the subscription form, includes her payment, and drops the envelope into a public mailbox on Tuesday. On Wednesday, before the publisher receives Emily's acceptance, the publisher decides to discontinue the promotional offer. According to the Mailbox Rule, Emily's acceptance became effective on Tuesday when she mailed it. The publisher is legally bound to honor the discounted subscription for Emily, even though they hadn't yet received her acceptance when they decided to end the promotion.