Key Case | Household Fire v Grant (1879) | Formation of Contract - Postal Acceptance

The case determined that where acceptance is sent by post, in accordance with the postal rules, acceptance is effective at the point of posting, it does not matter if the acceptance is never received by the offeror.

CASE SUMMARY

Claimant: Household Fire

Defendant: Grant

Facts: The defendant wrote to the claimants by post requesting shares in their company, asking to be notified in return by post. The claimants in line with the request allocated the request and sent notification via post, the letter never arrived with the defendants and subsequently no payment was made for the shares. When the claimants went bankrupt, the liquidator sought to enforce the contract for purchase of the shares.

Outcome: Liable – there was a contract

Legal principle: There was a legally binding contract to purchase the shares as acceptance is effective at the point of posting, it did not matter that the letter was never received.