The Mailbox Rule: Using the post to enforce contracts since 1818
Although email and other forms of digital communication seem to rule the day, many contracts are still negotiated and entered into the old fashioned way: hard copy. Aside from the shear angst of actually considering communication that isn’t performed through your email browser, contracts that are formed via mail (yes, actual mail) also provide some tricky areas that clients and attorneys should be aware of.
For attorneys reading this, think back to first year contracts and the “mailbox rule.”
For everyone else, consider the following situation:
Alice makes an offer to Bobby on January 1. On January 2, Alice decides to revoke the offer and puts a letter in the mail to Bobby that states this revocation. However, on January 3, before Bobby received the revocation letter, Bobby sends a letter to Alice accepting her original offer! According to common law tradition, because Bobby actually sent his acceptance before he received Alice’s revocation, the mailbox rule decrees that Bobby’s acceptance is effective and Alice is bound by the original terms.
Tension between e-contracting, US Mail and the courts
Aside from the traditional thought of the mailbox rule applying to postage and physical delivery, it would be difficult to not apply such a long-lasting legal theory to today’s common method of communication.
As we all know, email is more-or-less instantaneous. So what would happen if, in the example above, Alice sent her revocation via email at the same time Bobby sent his acceptance? This seems to be something that courts are still grappling with.
Timing is of the essence
In October 2014, the US District Court for the Eastern District of Michigan held that notice sent by email is not as reliable as traditional mail and could not be used to demonstrate that an employee actually received necessary documentation.
However, in the subsequent case of Lupyan v Corinthian College, the US Court of Appeals for the Third Circuit found that using US mail couldn’t assure actual delivery of documentation.
In light of these recent decisions and the increasing use of email to enter into binding contracts, we can expect courts to continue to address the tension between the common law tradition of the mailbox rule and common methods of contracting. But,
…until this is figured out, just keep in mind that although you may place your acceptance or rejection in the mail, or send it in an email, obtaining confirmation of your demands is always in your best interest.
Contract review by attorney
Contract law is a tricky area that is open to wide interpretation and changing law, especially as courts grapple with how to apply existing law to ever-emerging technologies. Because of these changes and obscurities, always be aware of communication with other parties, and if necessary, consult an experienced contract attorney for advice.