Hollwell securites formative PDF

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15/11/20

The ‘comment’ section of a case note on Holwell Securities v Hughes [1974] 1 WLR 155 Formative

Holwell Securities v Hughes (1974) is a rather significant case as it overrides the general principle of the postal rule. The case of Adams v Lindsell (1818) 1 highlights the general principle that as soon as a letter is posted, acceptance thus follows. The postal rule allows the offeree to have certainty and clarity, knowing that they have a valid contract. The postal rule also extends to cases in which the acceptance never arrives. In the case of Household Fire and Carriage Accident Insurance v Grant (1879)2, the form of acceptance never arrived, yet the postal rule was still applied, due to the common ground of both parties using the ‘post’ as a method of communication. All parties are aware of the risks and thus must bear the responsibilities of using this method. However, instantaneous communications have become more popular in today’s day and age, and therefore the postal rule is not always entirely applicable. Now there is an increased move towards the recipient rule, which is highlighted in the case of Entores v Miles Far East corporation (1955) 3. The recipient rule is one where the contract is only complete, when acceptance is received by the offeror. This step away from the postal rule is due to the increased clarity of instantaneous communications, it’s a lot easier to check to see if communication has been successful, e.g., checking if an email has been sent. Lord Wilberforce notes that ‘no universal rule can cover all cases.’4 The postal rule is still applied in a majority of cases, however there is the increasing move away from this where courts disapply the rule, this shows the courts 1 Adams v Lindsell, 1818, 106 E.R. 250 2 Household Fire and Carriage Accident Insurance v Grant (1879),4 Ex. D. 216 3 Entores v Miles Far East corporation (1955), 2 Q.B. 327 4 Brinkibon v Stahag Stahl und Stahlwarenhandels gmbH (1983), 2 A.C. 34

15/11/20

willingness to adapt to new methods of communication and new apparent responsibilities and risks. There is increased debate as to whether the postal rule should apply to emails. Many jurisdictions adopt the recipient rule when applying to emails. Chwee Kin Keong and others v Digilandmail.com (2004)5, highlights the recipient rule as being more convenient and relevant to use when dealing with emails, and the contract is only complete when the offeror has received and read the email of acceptance. Numerous documents are now interpreted to be in need of requiring notice, thus bypassing the postal rule. This is highlighted in Greenclose ltd v Natwest (2014)6. The entirety of case law in this subject suggests the importance of differentiating rules between cases. However, this also highlights the courts move towards the specific writing of contracts which clearly states the requirements to be fulfilled, such as ‘giving notice in writing’. Thus, the postal rule is seen to be increasingly historical and places increased doubt on the offerees intention to create legal relations, due to all the new methods of much faster and ‘instant’ communications. Therefore, the courts are not as eager to apply the postal rule and are seen to be more analytical of the context and wording of the offer, and the method of communication, as it’s seen in Holwell Securities v Hughes (1974).

5 Chwee Kin Keong and others v Digilandmail.com (2004), 2 SLR 594 6 Greenclose ltd v Natwest (2014), EWHC 1156...