The
Morrisons owned some property in Florida that they were going to sell to
Thoelke.Thoelke mailed a
contract for the sale of the property to the Morrisons in Texas.Then the Morrisons signed the
contract and sent it back to Florida.After mailing the contract back but before Thoelke
received it, the Morrisons called to repudiate the contract.The Morrisons sued to quiet
title in order to try to prevent
Thoelke from selling the property.
Morrison
argued that a renunciation prior to receipt of the acceptance voids the
acceptance.Acceptance is
complete only upon receipt of the mailed acceptance.
Thoelke
argued the acceptance was effective when the letter of acceptance was put
in the mailbox.
Quiet
title is a property term that means
that the title to the property has some confusion to it, and they can't
sell the property or borrow on it while there is this confusion.
The
Trial Court decided for the Morrisons, saying that the repudiation was effective,
and Thoelke appealed.
The
Appellate Court reversed and found in favor of Thoelke.
The
Court ruled that the offeree has the power to accept and close the
contract by mailing a letter of acceptance, properly stamped and
addressed, within a reasonable time.The contract is regarded as made at the time and place
that the letter of acceptance is put into the possession of the post
office. When the offeror assents and at the very instant of posting that
assent, an agreement has been reached. The right to effectively withdraw
must be dependent upon the initial determination of when the acceptance
is effective and irrevocable.There must be a point in time when a contract is complete. An
acceptance is effective upon mailing and not receipt.The acceptance was manifested at
the point of depositing in the mail.
The
Appellate Court goes into a long and involved history of the mailbox
rule.The Court cites three factors that went into the
creation of the rule in the case of Adams v. Lindsell:
It
is efficient to establish a "bright line", hard-edged rule for
the sake of efficiency.This is satisfied by making acceptance effective at the time
the envelope goes into the mailbox.
The
court wanted to limit the ruling of Cooke v. Oxley without overruling it.The new rule would allow offers
to be revoked any time before acceptance except in this case of mailing
acceptance.
In
terms of doctrine, a mailed offer is considered an offer that remains
continuously open while it's in the mail.
Every
State in the US follows the mailbox rule.
The
mailbox rule is very rigid.It is effective even if the
letter is lost in the mail!
The
mailbox rule has also been
applied to telegrams and faxes.
The
offeror is the master of the offer.The offeror can specify that an acceptance is only
valid when received, but you have to explicitly state that.
Everything
else in contract law is effective on receipt, not on delivery.
