Introduction
In the realm of contract law, the postal rule has long served as a guiding principle, dictating the moment when acceptance of an offer becomes legally binding. Traditionally, this rule applies to contracts initiated through postal mail, with acceptance deemed effective upon posting, regardless of when it reaches the offeror. However, as communication methods evolve in the digital age, questions arise regarding the applicability of this rule to contracts conducted via email. Is the notion of instantaneous communication truly accurate in the context of electronic correspondence? This article delves into the intricacies of modern communication and argues for a re-evaluation of the postal rule concerning contracts made through email.
Origins of the Postal Rule
The postal rule essentially states that if post is the proper method to communicate acceptance, then the acceptance is deemed complete as soon as the letter of acceptance is posted and not upon successful receipt of the communication. It originated in Adams v. Lindsell (“Adams”) wherein the defendants wrote to the plaintiffs offering to sell them certain fleeces of wool, requiring an answer (of acceptance) by post. The defendants posted their acceptance but the letter did not reach the plaintiffs in the expected time and the plaintiffs sold the wool elsewhere.
The court held that there was a contract as soon as the Defendants had posted their letter of acceptance. The court responded to the argument that acceptance needed to be communicated by pointing out that if that were the case, no contracts could ever be finalised by mail. They explained that if the defendants were only bound by their offer when the plaintiffs' acceptance was received, then the plaintiffs should not be bound until they received confirmation that the defendants had received their acceptance and agreed to it. This could lead to an endless cycle of waiting for confirmation of the previous receipt, making contract completion impossible.
The Case of E-mails
When assessing whether the postal rule should apply to emails, one must inquire whether the same reasons for implementing the postal rule to physical postal transmission of information also prevail in the case of transmission by Email. The above situation in the Adams also exists in the case of emails assuming there is no way of confirming the receipt of a message by a person (using reliable mail tracking for instance). The only way to know whether the receiver has opened your mail is for him to write back, and for him to know that you received the last confirmation mail of receipt is for you to write him another mail. This need for confirmation is reasonable considering that not all mail actually comes through since there is a layer of third party services involved in routing the email, which makes it less than fail proof [see Singapore HC judgment of 2004, para 97]. All these considerations are important where the postal rule does not apply since in that case, the contract is formed only upon receipt of the message. In absence of mail track or any other feature like the Whatsapp’s double tick and blue tick to ensure receipt (and whether the message has been viewed) of the message, it is impossible to conclude a contract on email without running into the endless cycle identified in the Adams case. Even where delivery protocols exist (which can be used to get knowledge of receipts), various problems such as there being no automatic notifications of failed delivery and their dependence on requests by the sending system make the issue far from settled [Eliza Mik, page 19]. Authors nevertheless suggest for businesses to make use of the message receipt services to track their emails.
The only difference between email and post is that of the expected time for delivery and the anticipated frequency of error. Following from this, one can argue that since the postal rule does not apply to telex, it should also not apply to emails since the speed of transmission is comparable in both modes. But authors have attempted to differentiate between email and telex (where it is settled that the postal rule does not apply) on the grounds that in the case of Email, the communication, as opposed to popular belief, is not truly instantaneous since there are intermediaries involved in the form of servers, routers and Internet service providers. This raises the question of when does a particular channel of communication qualify as instantaneous.
Defining Instantaneous
The perception of communication as truly instantaneous is a prevalent misconception in today's society [Eliza Mik, Page 13]. Whether it's a face-to-face conversation, a telephone call, or an email exchange, all forms of communication entail some degree of time delay and margin of error. Even in seemingly immediate interactions, such as face-to-face conversations, information transmission occurs through light and sound waves, followed by processing in the brain. Similarly, telephone calls, while often perceived as real-time communication, are subject to (atleast) the limitations of light-speed transmission. The delay may be minimal for local calls but becomes more pronounced in long-distance or interplanetary communication scenarios. Hence, it is difficult to draw a black and white line to categorize communications as instantaneous or not since there is no objective basis for the same owing to the fact that no mode is truly instant.
The Supreme Court’s Treatment and Section 13 of the Information Technology Act, 2000
The Supreme court of India in the case of Bhagwandas Goverdhandas Kedia vs. Girdhari Lal Parshottamdas & Co. held that “at the place of proposer where the acceptance is received shall have the jurisdiction for enforcement of contracts entered into using computer internet.” This is in line with section 13 of the Information Technology Act, 2000, which essentially states that an electronic record is dispatched from the originator’s place of business and received where the addressee has his place of business (it also emphasises on the usual place of residence to determine the time and place of despatch and receipt) The significance of this provision is twofold. First, it ensures that a resident of Rajasthan who is on vacation in Manali viewing an email of acceptance on his phone is not required to submit to the jurisdiction of Manali courts automatically since it is not necessarily the place of contract just because he checked the message there. Second and more important to our discussion, is the indication that the postal rule does not apply to email contracts since, had the postal rule applied, the place of contract would be the where the acceptance was sent from and not the place of receipt. A similar recognition to email contracts has been given in Trimex International Fze vs. Vedanta Aluminium Limited, India (2010).
When the Person Unable to Receive the E-mail is Not at Fault
There are further grounds of similarity in email and post such as the inability of the parties to know whether the message has been received successfully (or at all). In Entores v. Miles, the court held that where the postal rule does not apply, the duty to get the message through to its destination lies with the communicator, but if the message is not communicated to the recipient due to his own fault, the communication is still said to have been complete. [See also, supreme court in Bhagwandas v. Girdharilal, para 64] However, the court stated this in the context of telex [later also extended to fax in JSC Zestafoni G Nikoladze Ferroalloy Plant v. Ronly Holdings Ltd [2004] ] wherein the receiver is able to know that there is some issue with the printing ink for example, in response to which he can reply with “not receiving” to signify non-receipt. In case of email however, if the email does not reach the recipient at all, and not because of his own fault, he has no way of knowing the existence of the communication while the sender assumes reasonably that he has sent the acceptance validly. This is similar to the case of post since in both cases, it is possible that the sender and/or the intended receiver do not get to know of the failure in the mode of communication.
In Chwee Kin Keong v Digilandmall.com Pte Ltd [2004], ("Chwee") a Singapore court observed that “Arrival can also be immaterial unless a recipient accesses the e-mail, but in this respect e-mail does not really differ from mail that has to be opened.” This reinforces that only the time of receipt is material and if the party is unable to or chooses not to see the message reasonably at disposal (this has been held to be confined to business hours in commercial settings), the treatment will be the same as a telephonic or face to face call where the party simply chooses to not listen by “zoning out” and doesn’t ask the other person to repeat.
In Greenclose Ltd v National Westminster Bank plc [2014] , the court held “There would have to be actual communication” in relation to an email sent within the deadline but which was opened afterwards. The rule should not be confused however since the key reason for such a ruling was that the contract also did not permit sending communications via email and in any case the email was not subjected to the designated person of contact. In other cases, assuming no contract to the contrary, it is fairly clear that as per the receipt rule, receipt is complete when it becomes capable of being opened by the addressee (i.e. it enters his computer system). If the message does not reach the receiver due to his own fault (for example by having a full mailbox), the sender can’t be held responsible for knowing that the communication did not reach the intended person unless he has a way of knowing the same (mail track for instance).
Comparison with Telephone Calls and the Reasonable Expectation of Attentiveness
In the context of contracts made via telephone calls, the uncertainty surrounding message receipt is apparent. Like postal mail, where the sender receives confirmation through the act of posting, a caller cannot be certain that their offer has reached the intended recipient unless a response is received. Moreover, the recipient's confirmation of message receipt does not guarantee that the offeror acknowledges it, creating a similar situation as in communication by post where the postal rule applies.
However, the unique feature of a telephone call lies in the expectation of attentiveness. When a phone call is answered, there is a reasonable presumption that the recipient is actively engaged in the conversation, signifying successful communication. In contrast, emails, with their asynchronous nature, lack this expectation of immediate attention. Individuals may often go hours or even days without checking their inbox, leading to delays or missed opportunities for contract formation. In the case of calls however, once a call is picked up, it is the same as the mail being opened (assuming the person delivers the information without interruption) since there can be a reasonable expectation of attentiveness (similar to how it is the person’s own fault to have opened an email and to not read it). A voice recording (voicemail) that is sent since a person does not pick up during reasonable business hours is no different fundamentally from a written email since it can be said that it is the receiver's own fault for not picking up the phone during business hours and hence voicemail received during reasonable hours should be enough to constitute receipt as per the treatment of courts to telex and fax communications. On a normal call however, there is an expectation of attentiveness only once a call is picked up since no message can otherwise be delivered (unless through voicemail). The corollary of this is that if the other party does not give a response for more than a few seconds, it can be assumed that they are probably not on the line but in case of emails, one cannot know whether he has actual attention from the other party.
Conclusion
In conclusion, the evolution of communication technology necessitates a re-evaluation of traditional legal principles governing contract formation. The application of the postal rule to contracts conducted via email presents challenges and opportunities for legal interpretation. Moving forward, a nuanced approach that considers both the mode of communication and the context of interaction that the communication mode brings about is essential for ensuring clarity and fairness in contract law.
In the discussion of whether the postal rule applies to email, the reasons which led to the genesis of the rule seem to apply to emails as well. They can however be worked around by use of mail tracking services. In any case, courts have defended the non-application of the postal rule to email communications on the grounds that it occurs on a relatively short period of time and that “Notwithstanding occasional failure, most e-mails arrive sooner rather than later” [Chwee, Para 98] This means that courts have used to short time of communication and the lower rate of failure to defend non-application of the postal rule. But comparing emails to telephonic calls on these grounds is far from sound since the act of answering a telephone call signifies a level of expectation of attentiveness that is absent in email exchanges.
Commercial entities prefer to do business over email instead of call since it is easier to keep a record of the communications. However, considering the courts’ treatment, it is advisable to keep checking your email since if there is fault at your own end which results in not receiving the email, it will be attributed to you and work in favour of the sender.
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