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Bressan v Squires

Supreme Court of New South Wales [1974] 2 NSWLR 46

Overview

Consideration of the application of the postal rule.

Hand drawing lots of envelopes

 

Facts

Squires gave Bressan an option to purchase land. Clause 1 provided that it could be exercised ‘by notice in writing addressed to me at any time on or before 20 December, 1972.’ On 18 December Bressan posted a notice, addressed to Squires, exercising this option. It was received on 21 December. Was the option exercised?

Held

Bowen CJ

The general rule is that ‘a contract is not concluded until acceptance of an offer is actually communicated …’ but post presents an exception ‘based upon notions of expediency and convenience’. 

The rule applies whenever the parties contemplated post as a mode – even if just a possible or permitted mode – of communication. 

It is ‘not required that it should be within the contemplation of the parties that the action of posting should have the consequence of concluding the contract’ as this would considerably narrow the exception.

In this case the parties contemplated the option could be exercised by post. Consequently, prima facie, the exception applied. However, in this case there was further language used in the option that suggested actual notice of acceptance was required before acceptance would occur; consequently P’s case failed.