Mailbox Rule in US Contract Law: Dispatch, Exceptions, and P...

Introduction

The mailbox rule (also called the posting rule) is a default rule in US contract law that answers a basic timing question: when does an acceptance take effect? Under this rule, an acceptance sent by a method invited by the offer (and properly addressed with any required postage) is effective the moment it is put out of the offeree’s control—typically when it is dropped in a mailbox—even if the offeror has not received it yet.

This rule reduces timing disputes and places the risk of transmission on the party who made the offer. It can be changed by clear offer terms. Below is a clear, US-focused guide to the mailbox rule, its limits, key cases, and practical steps for businesses and attorneys.

What You’ll Learn

• What the mailbox rule is and when acceptance is effective on dispatch
• The main exceptions, including option contracts and improper addressing
• How revocation, rejection, and counteroffers interact with the rule
• How courts treat email and other electronic communications
• Leading cases from the US and England that shaped the doctrine
• Practical drafting tips to control how and when acceptance occurs
• What the Uniform Commercial Code (UCC) means for sales of goods

Core Concepts

Dispatch vs. Receipt: The Basic Rule

• Default rule: An acceptance sent in a manner and by a medium invited by the offer is effective when dispatched, not when received (Restatement (Second) of Contracts §63(a)).
• Proper dispatch: The acceptance must be correctly addressed, carry sufficient postage, and be sent in a reasonable way (Restatement §§65–66).
• Risk of loss: If a properly dispatched acceptance is delayed or lost in the mail, a contract still forms at the moment of dispatch. The offeror bears that transmission risk.
• Revocations are different: A revocation by the offeror is effective only when received by the offeree (Restatement §§42–43). The mailbox rule is primarily about acceptances.

Key Exceptions and Limits

• Option contracts: Acceptance under an option contract is effective only upon receipt by the offeror (Restatement §63(b)).
• Improperly addressed or unreasonable method: If the offeree uses an unreasonable medium or misaddresses the acceptance, the acceptance is generally effective only upon receipt (see Restatement §§65–67).
• Offer terms control: The offeror can require that acceptance is effective only upon receipt, or specify a method (for example, “acceptance must be emailed to contracts@company.com and is effective only upon our receipt”).
• Rejection and counteroffers: A rejection or counteroffer is effective only upon receipt. If a rejection is sent first and an acceptance is sent later, whichever arrives first governs (Restatement §40).

Medium and Method: Mail, Courier, Email, Text, and Portals

• Postal mail and reputable couriers: Courts usually treat USPS, FedEx, UPS, and similar services as reasonable means if the offer invites or allows them. Properly dispatched acceptances through these services will typically trigger the mailbox rule.
• Email: Courts vary. Some treat email like near-instant messaging (leaning toward receipt), while others apply dispatch principles when the offer invites email and the acceptance is properly addressed. The safest course is to state clearly in the offer whether acceptance by email is effective on dispatch or only on receipt.
• E-SIGN and UETA: The federal E-SIGN Act (15 U.S.C. §7001 et seq.) and state versions of the Uniform Electronic Transactions Act (UETA) give legal effect to electronic records and signatures. Under UETA, an electronic message is “sent” when it leaves the sender’s control and is “received” when it enters the recipient’s designated system. Contract terms can set what counts as “sent” or “received.”
• Instantaneous communications: Phone calls, live chat, and many text platforms are treated as real-time communications; acceptance generally takes effect when received.
• Online portals and click-to-accept: Acceptance typically occurs when the offeree clicks to agree within the system the offeror specified. Contract terms usually control timing.

Key Examples or Case Studies

• Example 1: Acceptance by Mail

  • A company offers to sell goods to a distributor. The distributor mails a properly addressed acceptance with correct postage.
  • Result: The contract forms when the distributor drops the letter in the mailbox, even if the company has not received it yet.

• Example 2: Crossed Communications

  • An employer mails a job offer. The candidate sends back a properly dispatched letter of acceptance that same day. The employer then mails a revocation, which the candidate receives after sending the acceptance.
  • Result: The acceptance was effective upon dispatch, so the contract formed before the revocation took effect.

• Adams v. Lindsell (1818, England)

  • The leading English case that established the mailbox rule. The court held that acceptance is effective upon mailing, not receipt.
  • Takeaway: Sets the classic dispatch rule later adopted in the US.

• Household Fire & Carriage Accident Insurance Co. v. Grant (1879, England)

  • The court held that acceptance is effective on posting even if the letter is lost and never arrives.
  • Takeaway: A properly mailed acceptance can bind the offeror despite non-delivery.

• Tayloe v. Merchants’ Fire Insurance Co., 50 U.S. 390 (1850)

  • Early US Supreme Court recognition that mailing a proper acceptance can form a contract.
  • Takeaway: US courts accept the rule that a timely, properly mailed acceptance forms an agreement.

• Morrison v. Thoelke, 155 So.2d 889 (Fla. Dist. Ct. App. 1963)

  • A Florida court confirmed that an acceptance mailed by the offeree formed the contract when mailed.
  • Takeaway: Illustrates the rule’s application in US courts and emphasizes that dispatch, not receipt, is the triggering event.

Practical Applications

• For offerors (to control risk and timing)

  • State the method and timing: “Your acceptance is effective only upon our receipt at [address/email].”
  • Designate specific addresses and recipients and require subject lines or purchase order numbers for email.
  • Use online portals or e-sign platforms where acceptance is logged by your system, with timestamps and audit trails.
  • Set clear deadlines that reference receipt, not dispatch: “We must receive your acceptance by 5:00 p.m. Eastern on [date].”
  • Require confirmations (e.g., “Reply with ‘ACCEPTED’ and attach the signed document”) and auto-acknowledgments from your system.
  • Include a “no contract until countersigned” clause if you want final sign-off.

• For offerees (to avoid disputes)

  • Follow the offer’s instructions exactly. If it invites email to a specific address, use that address.
  • If mailing, address it correctly, use sufficient postage, and keep proof (certified mail, tracking, or a mailing certificate).
  • Consider sending by two channels: mail for dispatch effectiveness plus email or courier for speed and proof of delivery.
  • Be careful with rejections: If you already mailed an acceptance, think twice before sending a rejection. If you sent a rejection first, deliver any later acceptance quickly so it arrives first.
  • Document timing: Keep screenshots, server logs, and tracking numbers. Save sent-folder copies with timestamps.

• For goods transactions (UCC context)

  • UCC §2-206 allows acceptance by prompt promise to ship or by prompt shipment of conforming goods. If the offer invites mail or email, sending an acceptance by that method at once is typically effective.
  • If you ship as acceptance, notify the offeror promptly to avoid confusion, especially with partial shipments or accommodations.

• For electronic communications

  • Add contract terms that define when an email is “received” (for example, when it hits the inbox of a specified address, not when someone reads it).
  • Consider time zones and business hours in your terms. State whether after-hours emails are deemed received on the next business day.
  • Use read receipts and system acknowledgments, but do not rely on them as the only proof.

Summary Checklist

• Acceptance by a reasonable, invited method is effective on dispatch if properly addressed and posted (Restatement §63(a)).
• Option contracts: acceptance is effective only upon receipt (Restatement §63(b)).
• Misaddressed or unreasonable methods usually make acceptance effective only upon receipt (Restatement §§65–67).
• Revocations are effective when received; rejections and counteroffers are effective when received.
• If a rejection is sent first and an acceptance is sent later, the one that arrives first controls (Restatement §40).
• A properly mailed acceptance can form a contract even if the letter is delayed or lost.
• Offer terms can override the mailbox rule; write clear acceptance clauses.
• For email and other electronic methods, specify “effective upon receipt” or “effective upon dispatch,” designate addresses, and use system acknowledgments.
• In UCC sales, acceptance can be by promise or prompt shipment; align your method with the offer to avoid disputes.

Quick Reference

Related terms to review: Mirror rule, Conditional acceptance, Promissory estoppel, Specific performance.