The mailbox rule in contract law states that if mail is a reasonable method of transportation for an acceptance, it becomes valid on the date it is deposited in the mailbox. This rule applies to payments on insurance premiums and some tax authorities. The rule only applies to acceptances, not rejections. Clauses may be used to avoid protracted negotiations. Conflicting documents are resolved by the acceptance taking precedence. An acceptance is valid unless the sender has reason to think it has not been delivered.
The mailbox rule is a doctrine in contract law that states that if mail is a reasonable method of transportation for an acceptance, the acceptance becomes valid on the date it is deposited in the mailbox and stamped. By extension, this rule is also used for payments on insurance premiums, where the payment is considered a form of acceptance of the contract, and some tax authorities also consider the date of the postmark as the date of acceptance. The mailbox rule was instituted under the rule of law in the 1800s and is found in the legal standards of many nations.
There are a number of alternative names for mailbox rule, including mail acceptance rule, posting rule, and postal rule. It is important to note that this rule only applies to acceptances. If someone mails a rejection of an offer, it’s considered valid on the date it’s received, not the date it’s sent.
In some cases, a contract will specifically address the mailbox rule, clarifying that a response must be received by a set date. In these cases, if someone waits until that date to send an acceptance, it might not be accepted, because it will be received after the commitment date. Clauses of this type are sometimes used when people wish to avoid protracted negotiations on a contract; if the deadline is based on when a response of any kind is received, leave the person offering the contract to choose someone else if no response arrives in time.
The mailbox rule also comes into play when conflicting documents are sent. For example, if someone decides to reject an offer and later accept it, there is a question as to which one is valid. According to the mailbox rule, the acceptance takes precedence, unless the rejection arrives before the acceptance is sent. Likewise, if someone makes an offer and then revokes it, but the person has already sent an acceptance letter, the offer must stand.
It has also been ruled in court that someone does not need to receive an acceptance for the acceptance to be valid, unless the sender of the acceptance has reason to think it has not been delivered. Once someone has left the acceptance in the mailbox, the deal is active, unless that person has become aware that something has happened at the post office that may have prevented the delivery. For example, if the mail is flooded immediately after placing the letter in the mailbox, the acceptance will not be considered valid.
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