LAW 2001 9 Household v Grant PDF

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Download LAW 2001 9 Household v Grant PDF

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Household Fire & Carriage Accident Insurance Co v Grant (1879) LR 4 Ex D 216 FACTS Grant applied for shares in the plaintiff company. They were allotted and a properly addressed letter of allotment was posted to his home. It was never delivered. Grant never paid the amount due on the shares and, when the company went into liquidation, it was still owing. The liquidator demanded payment. Grant refused, arguing that his offer to purchase the shares had never been accepted, that he was not a shareholder and that he was not liable to pay calls.

ISSUE •

When do acceptances become binding when they are sent via mail?

COURT RULING •

Grant was liable. The postal rule applied because the parties had contemplated that the acceptance would be by mail. Accordingly, the company’s acceptance of his offer to take up shares (the allotment) was complete upon posting and Grant was a shareholder from that point. Therefore, he was liable to the liquidator for the uncalled amount. The non-delivery of the acceptance was immaterial.

DISCUSSION NOTES •

Where the postal rule applies, a posted acceptance will be effective, even though it becomes lost or is never delivered....