offer and acceptance of contract in correspondence

Project on Offerand Acceptancein contract bycorrespondence

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Submitted by:Shreya PandeyRoll no.:73

SAP ID:500041255Acknowledgement

I am Shreya Pandey from BBA.LLB SAP ID : 500041255 and this is my project on the topic “Offer and Acceptance in Contract by Correspondence” . I would really like to thank miss. Pooja Gautam our faculty of Contracts for giving me such a nice topic by which I got a brief concept of contract in correspondence. I was guided on each and every step by her and I managed to complete my project. Understanding of this concept was really very important as it will help me in future.

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Thank You.

Contents

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Introduction

When contracting parties deal with each other by mail or telegram the contract is said to be made in correspondence. It has different conditions of being offered and accepted. The rule that the mailing of an acceptance completes the contract in a proper case, is affected by the application of the doctrine that an offer lapses if not accepted within a reasonable time or within the time fixed by the offer, as the case may be.

1. If the offer does not fix the time within which it must be accepted, such offer is to be accepted within areasonable time from the date at which it is received by the offeree, at least if the offer is not, to the knowledge of the offeree, unduly delayed in transmission, and if the offeror knows that the offer is to be forwarded to the offeree. In such cases the only question is whether the offer was accepted within a reasonable time from the receipt of the offer.

If the offer fixes a certain time within which it can be accepted, the question arises as to the liability ofthe offeror where the acceptance is mailed within the time limited, but at such a time that it will not reachthe offeror within the time limited, even if it is transmitted with all possible speed. If we regard the

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mail as the agent of the offeror, it would seem that mailing the acceptance within the time limited would besufficient, even if the offeree must know that the offeror will not receive such acceptance until after the expiration of the time limited. If the true reason is that the offeror contemplates acceptance by mailing the letter of acceptance, the question is then presented in such cases whether such offer in legal effect provides for mailing the letter of acceptance atany time during the time limited, or at such time as would in the ordinary course of post or telegraph bringsuch letter or telegram to the offeror before the expiration of the time thus limited. This latter view seems to be held by the courts.

2. No contract was created, where A offered to settle claim for a certain sum if paid in ten days, and B mailed A a check within ten days, but it was not received till afterwards.

3. Another question that is presented involves the effect of delay in transmission or of loss where the letter of acceptance was mailed in sufficient time to reach the offeror before the end of the time thus limited in the ordinary course of transmission. In thiscase, too, if we assume that the post office is the agent of the offeror mailing the letter of acceptance within the time limited, should complete the contract. If we attempt to enforce the probable intention of the offeror, the question is presented whether in such offer, he does not in effect provide that the acceptance must actually reach him within the time limited. It has been held that if an offer is by its

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terms to remain open a certain time, notice of acceptance must actually be received within the time thus limited, if there is no specific provision to the contrary, and if the offeror has done nothing to prevent the offeree from accepting the offer within thetime thus fixed by the terms of such offer.

4. Mailing such acceptance within the time limited is said not to be sufficient.

5. If an offer is, by its terms, to be accepted within a certain time, the offeree can not extend such time bymailing a letter of acceptance within the time limited,if such letter is received after the time limited.

6. the contract is not made unless the letter of acceptance is received within the time limited. If an offer requires acceptance by a certain time, depositinga telegram of acceptance with the telegraph company within such period of time, is not an acceptance. As has already been stated,

7. the act of the offeror in preventing the acceptance of an offer given for value within the time specified in such offer, may operate so as to prevent the offer from lapsing with the expiration of the time fixed by the offer. In such case, mailing the acceptance within the time specified, may be sufficient, even if it is not received until after the expiration of such period.

8. This results, however, from the wrongful act of the offeror, in making acceptance by the offeree impossible. and not from any special peculiarities of

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contracts by correspondence. The same result would be reached in cases in which a personal acceptance was contemplated; and not an acceptance by mail or telegraph.

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Acceptance Of OfferThe rule that the mailing of an acceptance completes the contract in aproper case, is affected by the application of the doctrine that an offer lapses if not accepted within a reasonable time or within the time fixed by the offer, as the case may be.(1) If the offer does not fix the time within which it must be accepted, such offer is to be accepted within a reasonable time from the date at which it is received by the offeree, at least if the offer is not, to the knowledge of the offeree, unduly delayed in transmission, and if the offeror knows that the offer is to be forwarded to the offeree. In such cases the only question is whether the offer was accepted within a reasonable time from the receipt of the offer.

If the offer fixes a certain time within which it can be accepted, thequestion arises as to the liability of the offeror where the acceptance is mailed within the time limited, but at such a time that it will not reach the offeror within the time limited, even if it is transmitted with all possible speed. If we regard the mail as the agent of the offeror, it would seem that mailing the acceptance withinthe time limited would be sufficient, even if the offeree must know that the offeror will not receive such acceptance until after the expiration of the time limited. If the true reason is that the offerorcontemplates acceptance by mailing the letter of acceptance, the question is then presented in such cases whether such offer in legal effect provides for mailing the letter of acceptance at any time during the time limited, or at such time as would in the ordinary course of post or telegraph bring such letter or telegram to the offeror before the expiration of the time thus limited. This latter view seems to be held by the courts.(2) No contract was created, where Aoffered to settle claim for a certain sum if paid in ten days, and B mailed A a check within ten days, but it was not received till afterwards.(3) Another question that is presented involves the effect ofdelay in transmission or of loss where the letter of acceptance was mailed in sufficient time to reach the offeror before the end of the

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time thus limited in the ordinary course of transmission. In this case, too, if we assume that the post office is the agent of the offeror mailing the letter of acceptance within the time limited, should complete the contract . If we attempt to enforce the probable intention of the offeror, the question is presented whether in such offer, he does not in effect provide that the acceptance must actuallyreach him within the time limited. It has been held that if an offer is by its terms to remain open a certain time, notice of acceptance must actually be received within the time thus limited, if there is nospecific provision to the contrary, and if the offeror has done nothing to prevent the offeree from accepting the offer within the time thus fixed by the terms of such offer.(4) Mailing such acceptance within the time limited is said not to be sufficient.(5) If an offer is,by its terms, to be accepted within a certain time, the offeree can not extend such time by mailing a letter of acceptance within the timelimited.

(1)5 Holmes v. Miles, 141 Ala. 401, 37 So. 588. 1 See Sec. 139 et seq(.2) Hutchinson &Southern R. R. Co. v. Wallace, 7 Kan. App. 612, 52 Ac. 458.(3) Hutchinson, etc., Co. v. Wallace, 7 Kan. App. 612, 52 Ac. 458.(4) Kibler v. Coplis, 140 Mich. 28, 112 Am. St. Rep. 388, 103 N. W. 531.(5) Kibler v. Caplis, 140 Mich. 28, 112 Am. St. Rep. 388, 103 N. W. 531.

limited, if such letter is received after the time limited.(6) In such case, contrary to the usual rule,(7) the contract is not madeunless the letter of acceptance is received within the time limited. If an offer requires acceptance by a certain time, depositing a telegram of acceptance with the telegraph company within such period of time, is not an acceptance.(8) As has already been stated,(9) the act of the offeror in preventing the acceptance of an offer given for value within the time specified in such offer, may operate so as to prevent the offer from lapsing with the expiration of the time fixed by the offer. In such case, mailing the acceptance within the time specified, may be sufficient, even if it is not received until after the expiration of such period.(10) This results, however, from the wrongful act of the offeror, in making acceptance by the offeree

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impossible; and not from any special peculiarities of contracts by correspondence. The same result would be reached in cases in which a personal acceptance was contemplated; and not an acceptance by mail or telegraph.

(6) Kibler v. Caplis, 140 Mich. 28, 112 Am. St. Rep. 388, 103 N. W. 531(.7) See Sec. 199.(8) Postal Telegraph-Cable Co.v. Louisville Cotton Seed Oil Co., 140 Ky. 506, 131 S. W. 277.(9) See Sec. 145.(10) Holmes v. Myles, 141 Ala. 401, 37 So. 588.

The theories Advanced todetermine the Time Of

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The offer is a power created by the offeror and he can make this power as broad or as narrow as he wishes. He may state in the offer that acceptance will not bind until it comes to his notice, or, on the other hand, hemay state that as soon as the offeree performs a certain act the offer will be accepted.Where the offeror has been specific and express the question of time of formation can rarely, if ever, be subject to uncertainty. But where, as in most cases, he does not specify any definite method of formation or communication,we must determine when formation takes place.At this point we shall examine the various theories which have been advancedto pinpoint the momentof formation, and later we shall ascertain the answer. The different theories advanced may be divided into twomain categories:

1. Declaration Theories:

(a) Declaration 'strictu sensu'

(b) Expedition

(c) Reception

2. Information Theory:

1. Declaration The ries: When the two parties are dealing face to face,the offeror brings the offer to the knowledge of the offeree. The latter manifestshis intention to accept the offer. The concurrence of willsrequired for the conclusion of a contract exists as

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soon as the party has obliged himself, i.e.accepted. Both have consented to the creation of a lien de droit between them -a contract is formed.

(a) Declaration 'strictu sensu': In contracts by correspondence, as soon asthe will of the offeree findsitself in the presence of the express and existing willof the offeror, and adheres to it in a manner equally express, the consent of the two parties is realized andtheir wills take reciprocal possession of one another.

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Historical developmentContract law is the product of a business civilization. It will not be found, in any significant degree, in precommercialsocieties. Most primitive societies have other ways of enforcing the commitments of individuals; for example, through ties of kinship or by the authority of religion. In an economy based on barter, most transactions are self-enforcing because the transaction is complete on both sides at the same moment. Problems may arise if the goods exchanged are later found to be defective, but these problems will be handled through property law—with its penalties for taking or spoiling the property of another—rather than through contract law.Even when transactions do not take the form of barter, primitive societies continue to work with notions of property rather than of promise. In early forms of credit transactions, kinship ties secured the debt, as when a tribe or a community gave hostages until the debt was paid. Other forms of security took the form ofpledging land or pawning an individual into “debt slavery.” Some credit arrangements were essentially self-enforcing: livestock, for example, might be entrusted to a caretaker who received for his services a fixed percentage of the offspring. In other cases—constructing a hut, clearing a field, or building a boat—enforcement of the promise to pay was more difficult but still was based on concepts of property. In other words, the claim for payment was based not on the existence of a bargain or promise but on the unjust detention of another’s money or goods. When a worker sought to obtain his wages, the tendency was to argue in terms of his right to the product of his labour.

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A true law of contracts—that is, of enforceable promises—implies the development of a market economy. Where a commitment’s value is not seen to vary with time, ideas of property and injury are adequate and there will be no enforcement of an wagreement if neither party has performed, since in property terms no wrong hasbeen done. In a market economy, on the other hand, a person may seek a commitment today to guard against a change in value tomorrow; the person obtaining such a commitment feels harmed by a failure to honour it to the extent that the market value differs from the agreed price.

Roman lawThe Roman Law of contracts, as found in Justinian’s law books of the 6th century AD, reflected a long economic, social, and legal evolution. It recognized various types of contracts and agreements, some of them enforceable, others not. A good deal of legal history turns upon the classifications and distinctions of the Roman law. Only at its final stage of development did Roman law enforce, in general terms, informal executorycontracts—that is, agreements to be carried out after they were made. This stage of development was lost withthe breakup of the empire. As western Europe declined from an urbanized, commercial Society  into a localized, agrarian society, the Roman courts and administrators were replaced by relatively weak and imperfect institutions.The rebirth and development of contract law was a part of the economic, political, and intellectual

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renaissance of western Europe. It was everywhere accompanied by a commercial revival and the rise of national authority. Both in England  and on the Continent, the customary arrangements were found to be unsuited to the commercial and industrial societies that were emerging. The informal agreement, so necessary for trade and commerce in market economies, was not enforceable at law. The economic life of England and the Continent flowed, even after a trading economy began to develop, within the legal framework ofthe formal contract and of the half-executed transaction (that is, a transaction already fully performed on one side). Neither in continental Europe nor in England was the task of developing a law of contracts an easy one. Ultimately, both legal systems succeeded in producing what was needed: a body of contract doctrine by which ordinary business agreements, involving a future exchange of values, could be made enforceable.The new contract law began to grow up throughout Europethrough the practices of merchants; these were at firstoutside the legal order and could not be upheld in courts of law. Merchants developed informal and flexible practices appropriate for active commercial life. By the 13th century, merchants’ courts had been established at the international trade fairs. The merchant courts provided expeditious procedures and prompt justice and were administered by men who were themselves merchants and thus fully aware of mercantileproblems and customs.In the 12th and 13th centuries the development of the law of contracts on the Continent and in England began

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to diverge. In England the common law of contracts developed pragmatically through the courts.

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Common lawFrom perhaps the 13th century on, English common law dealt with contractual problems primarily through two actions: debt and covenan. When a fixed sum of money was owed, under an express or implied agreement, for a thing or a benefit given, the money was recoverable through a simple action at debt.Other debt action was available for breach of a promise, made in an instrument with a seal, to pay a fixed sum of money. A so-called action at covenant could also be brought, but only for breach of a promise under seal. These actions did not, however, provide a remedy for the breach of an informal agreement to do something. In the 15th century the common-law courts started to develop a form of action that would render such agreements enforceable, and by the middle of the 16th century they had done so through the form of action known as assumpsit (“he has undertaken”). Originating as a form of recovery for the negligent performance of an undertaking, it came step by step to cover the many kinds of agreement called for by expanding commerce and technology. Having established in principle a comprehensive remedy, it was necessary for the courts to limit its scope. The courts found the limiting principle in the doctrine of “consideration,” according to which a promise as a general rule is not binding unless something is given or promisedin exchange. This consideration need not be of commensurate value,but it must be of some value, must be bargained for, and cannot be simply a formality.

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Civil lawOn the Continent, the revived study of classical Roman law had animmense influence upon the developing law of contract. It stimulated the rediscovery or construction of a general law concerning the validity of agreements. The Roman law, however, ascrystallized in Justinian’s law books, tended to confirm the notion that something more than an informal expression of agreement was required if a contract was to be upheld by a court.Another significant influence in the development of contract law on the Continent was the Roman Catholic Church. The church in itsown law (canon law) strongly supported the proposition that a simple, informal promise should be binding (pacta sunt servanda). This attitude was to encourage the development of informal contracts. The natural-law philosophers took up such ideas as pacta sunt servanda, although they were slow to abandon the view that some contracts, especially contracts of exchange, should require part performance if they were to be held enforceable. By the 18th century the speculative and systematic thought of jurists and philosophers had finally and fully carried the day. The legal writers and legislators of the period generally considered informal contracts as enforceable in the courts. Thus in the French Civil Code of 1804, contract was approached essentially in terms of agreement; obligations freely assumed were enforceable except when the welfare of society or the need to protect certain categories of persons, such as minors, dictated otherwise. With the generalization that contract rests ultimately on agreement, the civil-law systems achieved a foundation quite different from the common law’s view that contract is basically a promise supported by a consideration.All the Western systems of modern contract law provide mechanismsthrough which individuals can voluntarily assume, vis-à-vis 18

others, legally binding obligations enforceable by the other person. Contract law strives to give legal expression to the endlessly varying desires and purposes that human beings seek to express and forward by assuming legal obligations. The resulting system is open-ended; in principle, no limits are set in modern contract law to the number of possible variations of contracts.

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The rules of different legal systemsTraditional contract law developed rules and principles controlling the voluntary assumption of obligations, regulating the performance of obligations so assumed, and providing sanctions for failure to perform.

Offer and acceptanceSome of the rules respecting offer and acceptance are designed tooperate only when a contrary intention has not been indicated. Thus, in German Law an offeror cannot withdraw his offer until the time stipulated in the offer or, if no time is stipulated, until a reasonable time has passed; but this rule yields to a statement in the offer to the effect that it shall be revocable. In Anglo-American common law, when parties contract by correspondence, the acceptance takes place on dispatch of the letter, but the offeror can stipulate that no contract will be formed until the acceptance has reached him. These rules serve tofill in points on which the parties in their negotiations have not, for one reason or another, been specific.Another function of rules relating to offer and acceptance is to enable the parties to understand and to mark when their discussions pass from an exploratory stage to the stage of commitment. The concepts of offer and acceptance are somewhat formal; they assume that the negotiations pass through clearly distinguishable phases, which is often not the case. But they help the parties to distinguish negotiation from commitment. The two words offer and acceptance become firmly associated with the assumption of obligations.

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Different legal systems frequently advance comparable policies inquite different ways. Several distinctly different patterns are found in the approach of modern legal systems to the problems of whether an offeror is free to revoke his offer before acceptance and of when an acceptance is effective to form a contract. Perhaps the polar extremes are represented by German civil law onone hand and Anglo-American common law on the other. In the German view, an offer binds the offeror for any stipulated periodor, when the offer is silent as to time, for a reasonable period unless the offeror has expressly made the offer revocable. The common-law rule is the opposite: an offer is revocable until it has been accepted. The two systems also have sharply divergent rules with respect to the point at which, when the parties are contracting by correspondence, the acceptance takes effect to conclude the contract. In German law the acceptance takes effect when it reaches the offeror, in the sense that he either knows orcan learn of it. In the common law, on the other hand, if the offeree uses an appropriate means of communication, the acceptance is effective on dispatch unless the offeror stipulatedthe contrary in his offer. (A revocation by the offeror, however,does not take effect until received by the offeree.)How are these divergencies in the rules respecting offer and acceptance to be explained? In particular, do they reflect fundamental policy differences or simply different techniques designed to forward quite similar purposes? An examination of a typical problem posed when parties contract by correspondence suggests the latter explanation. Upon receipt of an offer, the offeree frequently changes his position by, for example, refusingor ignoring other offers, neglecting to seek additional offers, or himself making propositions based on the offer made to him. For this reason the legal system sees a need to provide the offeree with a secure point of departure for his decision, in order both to protect him and to facilitate commerce generally.

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The German system provides this protection by making the offer inprinciple irrevocable. The common law, on the other hand, found this solution excluded by its doctrine of consideration; as the offeree does not give anything in exchange for the offer’s irrevocability, consideration is lacking to support an obligationnot to revoke. (On the other hand, the Uniform Commercial Code, which has been adopted everywhere in the United States except in parts of Louisiana, provides that a firm offer made by a merchantis irrevocable even though the other party has given no consideration.) The common law is not entirely insensitive to theofferee’s predicament. The rule that the acceptance is effective upon dispatch creates a situation in which the offeror who wishesto revoke his offer is uncertain whether or not he can still do so, since his revocation is not effective until receipt, whereas the offeree’s acceptance, if one is made, takes effect on dispatch. This uncertainty makes the consequences of an attemptedrevocation unpredictable and thereby inhibits an offeror who might otherwise seek to revoke. In sum, the German and Anglo-American systems both try to achieve, and in a measure succeed inachieving, a fair balance between the offeror and the offeree.

Unenforceable transactionsIn all systems of contract law, certain classes of transactions are treated as unenforceable by the judicial process because theyare thought to involve unusual hazards for a contracting party orto be of marginal social utility. There are, in both civil-law and common-law systems, four kinds of concern that lead the systems to treat certain types of transaction as unenforceable. These four kinds of concern may be called evidentiary, cautionary, channeling, and deterrent. The evidentiary concern

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springs from the desire to protect both the individual citizen and the courts against manufactured evidence and insufficient proof. The cautionary concern seeks to safeguard the individual against both his own rashness and the importuning of others. The channeling concern seeks to mark off or label obligations that may be enforceable and to direct attention to the problem of the extent and kind of the legal obligation, so that the individual will know the legal significance that his action may have. Finally, the deterrent concern refers to those types of transaction that are discouraged because they are felt to be of doubtful value to society. Two quite different techniques are used to delineate types of transaction that are unenforceable in their natural, or normal, state. The first proceeds by describingthe type in functional or economic terms. The common-law Statute of Frauds enacted by the English Parliament in 1677 provided thatthe following six kinds of contracts should be unenforceable unless expressed in writing: contracts to sell goods exceeding a certain value; contracts to sell any interest in land; agreementsthat are not to be performed within a year of their making; agreements upon consideration of marriage; suretyship agreements;and undertakings by an executor or administrator to be surety on a debt of the deceased for which the estate is liable. Civil-law systems typically describe as unenforceable in the absence of an appropriate formality noncommercial contractual obligations exceeding a certain value; mortgages created by contract; noncommercial compromise agreements; marriage contracts; agreements binding a party to transfer all, or a fractional part of, his property; leases to run for more than a year; assumptionsof the obligation to stand as surety, at least when the operationis not a commercial one on the surety’s part; promise of an annuity; and promises to make gifts.Another less direct technique for delineating unenforceable typesof transaction derives from the common law’s doctrine

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of consideration. It holds transactions unenforceable in the absence of a bargained-for exchange. This class would include, for example, promises to make gifts. The approach tends to be tooall-embracing, treating certain types of transaction as suspect when there is little or no practical justification for doing so. It is not clearly demonstrated, for example, that an option agreement made by two businessmen should be handled differently from many other kinds of commercial dealings. A strong argument exists that the common law’s handling of commercial options, business compromises, and other business transactions lacking an element of exchange is more a logical deduction from the general doctrine of consideration than an expression of justifiable policy concerns.Except in cases where the ground for unenforceability is radical,when a given transaction type is considered unenforceable the legal system should prescribe an extrinsic element the addition of which will cure the defect—for example, expressing the agreement in writing, performing it in part, or having a documentdrawn up with the participation of a legally qualified notary or other public official who holds a special appointment from the state and is charged with handling and recording various types oftransactions.

A complex situation has arisen with respect to the two most generally available extrinsic elements, the seal and the payment of a nominal consideration. Various states of the United States no longer consider the seal as an effective extrinsic element. The seal’s decline is rooted in its changed significance in the modern, literate, democratic world. The seal was originally an impression, usually in wax, of a device, or design, representing an individual or a family. In modern times, the courts, with legislative assistance in a fair number of the states of the United States, have recognized easy-going substitutes for the waxseal, such as simple writing presumed to have been made for

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sufficient consideration or, in special circumstances, parol agreement for valid consideration. The effect has been to render the seal progressively less effective, particularly from the cautionary perspective, and many courts now refuse to accept it as a satisfactory formality.Nominal consideration is a subtle and ingenious formality. Its essence is the introduction of a contrived element of exchange into the transaction. Thus A, desiring to bind himself to give B $10,000, requests B to promise to give (or to give) A a peppercorn in exchange. B’s promise (or performance) is an element, extrinsic to a normal gift promise, introduced by the parties in an effort to render the transaction enforceable (sincethe law does not treat normal gift promises as enforceable). Common-law courts often accept nominal consideration when used ina business context, such as in an option arrangement or a compromise agreement; its effectiveness is understandably more doubtful in the context of a gift promise, since such a transaction involves greater dangers for one party and is socially more marginal.Civil-law systems have less need than the common law for a formality such as nominal consideration; they prescribe methods directly in their statutes. Interestingly enough, however, in some civil-law systems an analogous, judicially developed formality has emerged—the disguised donation (donation déguisée) of French law, in which the parties cast a gift promise in the form of an onerous transaction, such as a sale. It can be argued that both the nominal considerations and the disguised donation serve at least the cautionary and channeling functions of formalities mentioned above.Another kind of extrinsic element recognized by some courts, especially in the common-law countries, is one party’s reliance upon the promise of the other. The fact of reliance argues in favour of enforcement because it indicates

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that an underlying understanding existed between the parties and because the relying party may suffer as a consequence of his change of position. Some courts will enforce initially suspect transactions when several extrinsic elements are present in combination. A common-law court, for example, may enforce a gift promise in which the element of reliance was present in addition to a seal or a nominal consideration. Other extrinsic elements, either alone or in combination with reliance, a seal, or a nominal consideration, may also render a transaction enforceable.Cases, for example, in which the promisor dies without attemptingto revoke a gift promise could be enforced, as distinguished fromcases in which the promisor seeks to revoke.

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PerformanceContract law seeks to protect parties to an agreement not only byrequiring formalities but in many other ways as well. Thus rules respecting deceit,fraud, and undue influence are designed to ensure that contractual obligations are assumed freely and without one party misleading the other. Other rules regulate the modification of ongoing contractual relations with a view to preventing a party with considerable bargaining power from unfairly imposing changes in the contract.The law also allows contractual relations to be adjusted when they have been thrown out of balance by unforeseen circumstances.The task of adjustment is relatively easy in cases in which both parties made a mistake or in which one party laboured under a mistaken assumption that was, or plainly should have been, known to the other. The problem of mistake becomes more intractable when the error is chargeable to only one party. The solutions reached for such situations are complex and defy general statement.Catastrophic events such as inflation, political upheaval, or natural disasters may upset the economy of a contract. In the case of natural catastrophes, relief is frequently available under theories of force majeure (action by a superior or irresistible force) and “act of God” (act of nature that is unforeseeable and unpreventable by human intervention). When the unsettling circumstances are economic in their nature, as with severe inflation or deflation, a solution is difficult to find. Aparty who benefits from inflation in one contractual or economic relation may suffer from it in another. A general readjustment incontracts would be enormously complicated and time-consuming and would interject an undesirable element of uncertainty into economic and business activity. Only under exceptional circumstances—and usually in the form of special legislation—are

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contractual relations adjusted for the effects of severe economicdislocations.

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Failure to performAnother branch of contract law deals with the sanctions that are made available to a contracting party when the other party fails to perform his contractual obligations. When these sanctions takethe form of money damages—as they usually do in practice, even though some civil-law systems have a theoretical preference for specific relief—the system must decide whether the plaintiff is to be put in the same position economically that he would have been in had the contract been performed (expectancy damages) or simply reimbursed for the actual losses, if any, flowing from hisreliance on the contract (reliance damages). Reliance damages can, of course, be very large. A subcontractor who fails to deliver parts required for the construction of an ocean liner (ordelivers faulty parts) may be responsible for heavy reliance damages resulting from delay in the work or actual damage to the vessel. Legal systems utilize various techniques to limit both reliance and expectancy damages when otherwise they would be unreasonably large.If a person has agreed to buy an article from a merchant, his refusing to take delivery will not ordinarily produce substantialreliance damages. Delivery costs will have been incurred, but themerchant will presumably not have lost sales elsewhere. In such circumstances, the merchant will seek to recover not his deliverycosts but his lost profit—his expectancy damages. The law allows relief on the basis that the expectancy created by an enforceablepromise has a current economic value, measured by the economic gain that the party would derive if the particular agreement wereperformed.

In some circumstances, performance is not measurable in terms of market value—as, for example, when one relative has agreed to sell to another a family painting of sentimental value but of

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little intrinsic worth. Many legal systems in such a case requirespecific performance (that is, compliance with the precise terms agreed upon in the contract). The availability of specific reliefvaries among contemporary legal systems, for reasons that seem more historical and doctrinal than practical.

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Other problems of contract by correspondenceMany contracts involve more than two persons. The law of contracts provides special rules for regulating claims by multiparty plaintiffs or claims against multiparty defendants, orfor determining rights among the parties. Multiparty problems arise in other contexts as well. There is the problem of whether the immediate parties to a contract can enter into an agreement that will confer rights upon a person not an original party to the contract. Probably because the dogmatic structure of contractlaw was largely formed on the model of the simpler two-party situation, and because the contract for the benefit of third parties did not have great practical importance until such relatively modern developments as the emergence of life insurance, many systems of contract law have encountered difficulty in working out the relationship between the third party and the underlying contract. English lawtook the view that,as a rule, a person cannot acquire a right on a contract to whichhe is not a party. Some of the problems posed are difficult to resolve: under what circumstances and to what extent should the third party control the underlying contract when, for example, the original parties desire to rescind or modify it?

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Correspondence Regarding Offers, Acceptances & RejectionsIn addition to your resume, cover letter, and writing sample, there is other correspondence that you will be responsible for during your job quest. Thank you letters, reimbursement requests, and acceptance/rejection letters provide you with opportunities to further interact with an employer, as well as to provide them with important information.

Receiving and Accepting an OfferYou should acknowledge an offer of employment within 24hours of receiving it. You should be prepared to eitheraccept, decline or request more time to decide. Do not accept an offer unless you are fully prepared to work for that employer. When accepting an offer, it is important that you proceed in a professional manner. Assoon as you have decided to accept an offer, you shouldtelephone either the individual who made you the offer or the recruitment office of the employer and inform them of your decision. Upon completing your telephone call, you should write the employer as soon as possibleconfirming your decision. Again in a very professional 32

manner, you will express your gratitude at receiving the offer and state that you enjoyed both your visit tothe employer and the opportunity to meet with several of the employer's lawyers. Under the NALP rules, employers should hold offers for first year students open for at least two weeks. Offers for second and third year law students that are made during the fall recruiting season have separate deadlines set by NALP. The CPDC or NALP websites will have the time lines for subsequent years.

Declining an OfferIt is perhaps even more critical to decline offers in atimely and professional manner, as these may be the first employers you contact should you seek other opportunities as a 2L, 3L, or after graduation. As soonas you have decided to reject an offer, you should telephone either the individual who made you the offer or the recruitment office and inform them of your decision. Your decision will usually free up an offer, which may then be extended to another law student. If you are only able to reach an employer's voicemail during their regular business hours, leave a message declining the offer. Your promptness will be most

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appreciated and will contribute to the overall efficiency of the recruiting season.Upon completing your telephone call, you should write the employer as soon as possible confirming your decision. In a professional manner, express gratitude at receiving the offer and state that you enjoyed both your visit and the opportunity to meet with several of the employer's lawyers. You should also express your regrets in reaching the decision to decline the flattering offer. This letter will be placed in your file. If you contact the employer for a position in thefuture, there is a good chance it will still have this file and will refer to its contents in deciding whetherto consider you for a position. A courteous letter may inure to your benefit. 

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Postal RuleMain article: mailbox Rule

As a rule of convenience, if the offer is accepted by post, the contract comes into existence at the moment that the acceptance was posted (Adams v. Lindsell (1818) 106 ER 250). This rule only applies when, impliedly or explicitly, the parties have post in contemplation as a means of acceptance. [12] It excludes contracts involving land, letters incorrectly addressed and instantaneous modes of communication. The relevance of this early 19th century rule to modern conditions, when many quicker means of communication are available has been questioned,but the rule remains good law for the time being.

Knowledge of the offerIn Australian law, there is a requirement that an acceptance is made in reliance or pursuance of an offer: see R v. Clarke (1927) 40 C.L.R. 227.

Rejection of offer or lapse oftimeAn offer can be terminated on the grounds of rejection by the offeree,that is if the offeree does not accept the terms of the offer or makesa counter-offer as referred to above.Also, upon making an offer, an offeror may include the period in whichthe offer will be available. If the offeree fails to accept the offer within this specific period, then the offer will be deemed as terminated.

Death of offerorGenerally death (or incapacity) of the offeror terminates the offer. This does not apply to option contracts.The offer cannot be accepted if the offeree knows of the death of the offeror.[13] In cases where the offeree accepts in ignorance of the death, the contract may still be valid, although this proposition depends on the nature of the offer. If the contract involves some

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characteristic personal to the offeror, the offer is destroyed by the death.

Death of offereeAn offer is rendered invalid upon the death of the offeree: see Re Irvine.

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Conclusion

It is now settled that the acceptance in case of contract by correspondence where an answer is invited by post is complete as soon as the letter of acceptance is dispatched. Where anoffer is made by post it may be assumed that an answer by post is invited unless the contrary is indicated, but the rule is not necessarilyconfined to cases where the offer is made in that manner. "Where the circumstances are such that it must have been within the contemplation of the parties that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of an offer, the acceptance is complete as soon as posted." The rule has not been established without vigorous dissent. "I have always believed the law to be this, that when an offer is made to another party, and in that offer there is a request, expressed or implied, that he must signify his acceptance by doing some particular thing, then as soon as he does that thing he is bound. If a man sent an offer abroad saying, 'I wish to know whether you will supply me with goods at such and such a price, and if you agree to that you must ship the first cargo as soon as you get this letter,' there can be no doubt that as soon as the cargo was shipped the contract would be complete, and if the cargo went to the bottom of the sea it would go to the bottomof the sea at the risk of the or-derer. There was at first some hesitation in applying this rule in caseswhere the letter of acceptance was lost or delayed in transmission; but it is now settled by the great weight of authority that, when an acceptance has been posted, the contract is complete, and cannot be affected by the subsequent fate of theletter.56 "The acceptor," it has been said, "in posting the letter has 'put it out of his control, and done an extraneous act37

which clinches the matter, and shows beyond all doubt that each side is bound.' How, then, can a casualty in the post, whether resulting in delay - which in commercial transactions is often asbad as no delivery- or in nondelivery, unbind the parties or unmake the contract?" 57 The rule is the same where the telegraphis properly used as the mode of signifying acceptance, and the contract is complete on delivery of the message to the telegraph company.58 This rule, of course, does not apply where the offer expressly or by implication stipulates that the contract is to becomplete, and the offer binding, when the acceptance is received.In such a case the mailing of the acceptance is not enough. But communication of acceptance to the offeror's agent is not sufficient, even where it is accompanied by a direction to give notice. There is much force In the argument that communication is essential to the counter promise which is the consideration , andthat hence the acceptance cannot take effect until its receipt Moreover, granting that the offeror must be taken to have contemplated that the post may be used as a means of communicating the acceptance, it is its communication, and not the mere putting it in course to be communicated, which he practically contemplates. It is a somewhat violent assumption to attribute to him any different intention than that which would beexpressed by making the offer conditional upon receipt of the acceptance, which would be enforced. To constitute an acceptance, however, the letter must be actuallyand properly posted. If it is delivered to an agent of the acceptor, and he neglects to mail it, or to a postman not authorized to receive letters, or if it is posted without a stamp, or improperly addressed, it is not an acceptance.In England, where the doctrine was first established that the mailing of a letter of acceptance makes the contract, a letter passes beyond the control of the sender when it is mailed; and such was formerly the case in this country. Under the present regulations of the United States Post Office Department, however,the sender may, upon proper identification, reclaim the letter from the office at which it has been mailed, or even require the postmaster at such office to telegraph to the office to which it

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is addressed, directing its return, if undelivered. Since, therefore, a letter does not pass beyond the control of the sender until it is delivered, a question has arisen as to whetherthe mere posting of the letter constitutes an irrevocable acceptance. In accordance with the general rule, however, it has been held that it does, and that a contract exists from the moment of mailing the letter, notwithstanding that it is reclaimed from the mails by the sender.. Deposit of a letter in a street letter box is equivalent to deposit in the post office.. "While constructive notice of acceptance is permitted to take the place of actual communicationin such cases, still the law requires that the message of acceptance shall pass beyond the recall or control of the acceptor.

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