Business Law Essay Example | Topics and Well Written Essays - 1000 words - 17

Business Law - Essay Example Lindsell, 1818). One of the major advantages provided by the postal rule to commercial contracts lies in the fact that the offeror cannot take undue advantage of delay or difficulty encountered in communication. This is especially true of situations where the offeree has no knowledge regarding the receipt of the acceptance by the offeror(Raymond 2006, p. 7). In accordance with this rule, whenever communication of acceptance of an offer is from a place that is not nearby or contiguous, then the acceptance is rendered binding from the moment that it is mailed or dispatched. This has a major bearing on the receipt rule; because, the acceptance of an offer becomes binding with dispatch of the acceptance by the offeree, and does not depend upon the receipt of the acceptance by the offeror (Raymond 2006, p. 5). The operation of the postal rule is unaffected by factors, such as the receipt of the acceptance by the offeror or the intimation of a revocation from the offeror, whilst the message regarding the acceptance of the offer has not been received. In effect, any risk attendant upon a failure to communicate clearly has to be borne by the offeror. This is one of the major outcomes of the postal rule. Subsequent to the decision in the Adams case, the postal rule has enjoyed wide support, as it has proved to be expedient for business transactions (Raymond 2006, p. 6). There is considerable support for the postal rule, because it is seen to apportion the risk involved in the transmission of acceptance on the offeror. Such allocation of risk is justified because; first, risk has to allocated to either of the parties, and it is difficult to make a choice; second, compelling the offeror to bear the risk is equitable, as the offeror originates the offer and consequently is in a better position to control transmission risk, although he preferred to abstain from exercising such