Holwell Securities Ltd v Hughes

The postal rule does not apply where the offer requires actual communication of acceptance, or where it would produce manifest inconvenience or absurdity.

Citation
[1974] 1 WLR 155
Court
Court of Appeal
Year
1974
Subject
Contract Law
Topic
Offer and acceptance

Facts

Dr Hughes granted Holwell Securities an option to buy his house and surgery premises, to be exercised by notice in writing to the intending vendor within six months. Within the six months, Holwell's solicitors posted a letter to Dr Hughes exercising the option, but the letter never arrived. A copy sent to Dr Hughes's solicitor was not notice to him personally. After the six months had expired, Holwell sued for specific performance, arguing that under the postal rule the option was exercised when the letter was posted.

Legal principle

The Court of Appeal held that the option had not been exercised. The postal rule does not apply where the terms of the offer, expressly or by implication, require that acceptance actually reach the offeror. The words notice in writing to the intending vendor required actual communication, so the notice took effect only when received. Lawton LJ added that the postal rule does not apply where it would lead to manifest inconvenience and absurdity.

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