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Henthorn v Fraser [1892] 2 Ch 27

Contract – Postal Rule – Contract Formation – Specific Performance – Acceptance – Offer

Facts

The complainant and the defendant had been negotiating the purchase price of houses. An original offer to buy the houses for £600 had been rejected. The defendant, Mr Fraser, handed the complainant, Mr Henthorn, a note that detailed an option to sell the property for £750, which would be valid for 14 days. While this offer was being considered, another buyer was interested and the defendant concluded a contract with them instead. The next day, the defendant then withdrew the offer to the complainant by post. This note did not reach Mr Henthorn until 5pm. In this time, Mr Henthorn had already responded to the offer by post with an unconditional acceptance to buy the houses for £750. But, this was not delivered to Mr Fraser until the office was closed and he did not read this acceptance until the morning.

Issues

The issue in this case concerned the revocation of the offer. This was completed before the postal acceptance of the offer was received. It was for the court to decide whether the acceptance of the offer was valid or if the contract had been revoked successfully before the acceptance.

Held

The court held that the offer was valid and an order for specific performance made for £750 to purchase the property. The postal rule in Adam v Lindsell would apply, which stated that it would be reasonable for acceptance of an offer to take place by post. However, this rule would not apply to the revocation of an offer. Post was a way of communicating offer acceptance, but the acceptance itself is completed as soon as it is posted. This was reasonable to expect since both parties lived in different towns.


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