mailbox rule

Primary tabs


The mailbox rule (also called the posting rule), which is the default rule under contract law for determining the time at which an offer is accepted, states that an offer is considered accepted at the time that the acceptance is communicated (whether by mail e-mail, etc). Parties can alter their contract to not use the mailbox rule to and determine between themselves at what time an offer will be considered accepted. The rule originated in the British case of  Adams v. Lindsell (1818) B & Ald 681, when the Court adopted the doctrine and applied it to bilateral contracts. As with most of contract law, the mailbox rule varies from state to state.

Restatements Language

Restatement (Second) of Contracts § 63 (1981) echoes the opinion of many states, distinguishing between an option contract and a bilateral contract. The Restatement reads: "Unless the offer provides otherwise, (a) an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree's possession, without regard to whether it ever reaches the offeror; but (b) an acceptance under an option contract is not operative until received by the offeror."

In other words, under jurisdictions which have adopted the Restatement rule, the mailbox rule doctrine applies to bilateral contracts, but not to option contracts.

California Rule

California, in the minority of states, applies the mailbox rule to option contracts as well. In Palo Alto v. BBTC Co., 11 Cal.3d 494 (1974), the Court held, "In California . . .the "effective upon posting" rule has received legislative sanction and is the declared policy of this state . . . As previously explained, when the notice of exercise of the option is viewed as an acceptance of an irrevocable offer, such notice is clearly covered by section 1583." 

Further Reading

For more on option contracts, see this Florida State University Scholarship Repository article, this California Law Review article, and this Indiana Law Journal article