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Postal Rule

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A contract is a legally binding agreement, be it written or unwritten. In order for a contract to be legally binding, an agreement must satisfy certain requirements which are offer and acceptance, intention to create legal relations, certainty as to the terms of the agreement, capacity to contract, and consideration provided by each of the parties. The rules on offer and acceptance are usually used to pinpoint when a series of negotiations has passed that point, in order to decide whether the parties are obliged to fulfil their promises.
An offer is intimation, by words or conduct, of a willingness to enter into a legally binding contract. An acceptance of an offer means unconditional agreement to all the terms of that offer. It will often be in oral or in writing, but in some cases an offeree may accept an offer by conduct, as illustrated in Brogden v Metropolitan Railway. An acceptance does not usually take effect until it is communicated to the offeror. In other words, mental assent is not enough. This was decided in Entores v Miles Far East Corporation.
Where parties negotiate face-to-face, communication of the acceptance is unlikely to be a problem. However, difficulties tend to arise where the parties are communicating at a distance. The main reason for the postal rule is historical, since it dates from a time when communication through the post was even slower and less reliable than it is today. It was developed before instantaneous methods of communication such as telephone, fax, emails and text messages came about. Therefore, there is an argument that the postal rule of acceptance no longer serves a useful purpose in the world of modern business communications. Nevertheless, the principle stands. Thus, when dealing with letters or telegrams, the rule still applies.
The general rule for the acceptance by post is that they take effect when they are

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