The seller had granted to the buyer a option in return for the payment of a sum of money. The option contract gave the grantee the right to require the grantor to sell if the grantee exercised the option within the stipulated period. The court considered the application of the rule as to actual acceptance in the postal rule in contract law in an option context.
Held: The parties must have contemplated that the post might be used as a means of communicating the exercise of the option and that therefore the option was exercised when the grantee sent a telegram to that effect addressed to the grantor.
Despite the option not being formally exercised, there was nothing to prevent the parties from coming to a subsequent agreement extending the period of the option.
Judges:
Farwell J
Citations:
[1904] 1 Ch 305
Jurisdiction:
England and Wales
Cited by:
Cited – Holwell Securities Ltd v Hughes CA 5-Nov-1973
An option was to be exercised ‘by notice in writing’ before a certain date. The solicitors’ letter doing so was addressed to the defendant at his residence and place of work, the house which was the subject of the option to purchase, was posted by . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 22 May 2022; Ref: scu.276448
