On 5 August, X sends a written offer by post to Y, to purchase Y’s ROLEX watch
for R10000. One of the terms in the offer is that the offer will lapse on 20 August.
The offer also stipulates that X must be aware of the acceptance, for any legal
obligations to arise. Y writes the letter of acceptance on 9 August in response
to X’s offer, and Y posts this written acceptance on 10 August. X’s son collects
the post from the Post Office on 17 August, and amongst the sealed letters of
post collected, is Y’s acceptance. X’s son is not responsible and only hands all
the sealed post to X, on 20 August. On 21 August, X opens the post and reads
the letter of acceptance. Was a legally binding contract concluded between X
and Y? Discuss and substantiate fully. TOTAL [20]
The problem
The question is whether Y accepted X's offer in time and Y and X thus reached
consensus and concluded a valid contract of sale. To be more specific, the question
relates to the legal rules pertaining to when and where the acceptance takes effect
Analysis of the case law and facts of the case
The question deals with when and where an acceptance takes effect. Various theories
are employed to determine the place and time for the conclusion of a contract. The
general rule to determine such an issue is the information theory. In accordance with
this theory, the offeror must learn of the offeree’s acceptance for the acceptance to
have legal effect. Where a time limit has been prescribed for the acceptance to take
effect, the offer automatically lapses if it has not been accepted within the prescribed
time period.1
While the information theory is the general rule, there are exceptions to the general
rule which may apply. One such exception relates to postal contracts, in which case
the expedition theory may apply, provided that all the requirements for this exception
can be proved. The expedition theory holds that a contract is concluded when and
1 D Hutchinson and S Pretorius (eds) The law of contract in South Africa (Oxford University Press
2017) 56.
for R10000. One of the terms in the offer is that the offer will lapse on 20 August.
The offer also stipulates that X must be aware of the acceptance, for any legal
obligations to arise. Y writes the letter of acceptance on 9 August in response
to X’s offer, and Y posts this written acceptance on 10 August. X’s son collects
the post from the Post Office on 17 August, and amongst the sealed letters of
post collected, is Y’s acceptance. X’s son is not responsible and only hands all
the sealed post to X, on 20 August. On 21 August, X opens the post and reads
the letter of acceptance. Was a legally binding contract concluded between X
and Y? Discuss and substantiate fully. TOTAL [20]
The problem
The question is whether Y accepted X's offer in time and Y and X thus reached
consensus and concluded a valid contract of sale. To be more specific, the question
relates to the legal rules pertaining to when and where the acceptance takes effect
Analysis of the case law and facts of the case
The question deals with when and where an acceptance takes effect. Various theories
are employed to determine the place and time for the conclusion of a contract. The
general rule to determine such an issue is the information theory. In accordance with
this theory, the offeror must learn of the offeree’s acceptance for the acceptance to
have legal effect. Where a time limit has been prescribed for the acceptance to take
effect, the offer automatically lapses if it has not been accepted within the prescribed
time period.1
While the information theory is the general rule, there are exceptions to the general
rule which may apply. One such exception relates to postal contracts, in which case
the expedition theory may apply, provided that all the requirements for this exception
can be proved. The expedition theory holds that a contract is concluded when and
1 D Hutchinson and S Pretorius (eds) The law of contract in South Africa (Oxford University Press
2017) 56.
