Under the mailbox rule, when does an acceptance become effective?

Under the mailbox rule, when does an acceptance become effective?

• A. On dispatch in a properly posted and addressed letter
• B. On receipt by the offeror
• C. On the next business day
• D. When the offeror signs the contract

Answer: (A)

The main idea here is that a contract is formed when the offeree dispatches the acceptance, not when the offeror receives it. Under the mailbox rule, an acceptance becomes effective at the moment it is properly mailed—i.e., dispatched in a properly addressed and stamped letter (or other authorized medium) and placed in the postal system. Once sent in that proper way, the contract is formed even if the offeror never actually reads or receives the letter. This is why dispatch is the key moment. This explains why the other notions don’t fit: it isn’t about when the offeror receives the acceptance, nor about the offeror signing anything, nor about a specific next business day. The rule focuses on the offeree’s act of sending the acceptance in a proper form. Note that there are exceptions if the offer specifies that receipt controls, or if an unauthorized method is used, but with proper mailing, the acceptance is effective upon dispatch.

The main idea here is that a contract is formed when the offeree dispatches the acceptance, not when the offeror receives it. Under the mailbox rule, an acceptance becomes effective at the moment it is properly mailed—i.e., dispatched in a properly addressed and stamped letter (or other authorized medium) and placed in the postal system. Once sent in that proper way, the contract is formed even if the offeror never actually reads or receives the letter. This is why dispatch is the key moment.

This explains why the other notions don’t fit: it isn’t about when the offeror receives the acceptance, nor about the offeror signing anything, nor about a specific next business day. The rule focuses on the offeree’s act of sending the acceptance in a proper form. Note that there are exceptions if the offer specifies that receipt controls, or if an unauthorized method is used, but with proper mailing, the acceptance is effective upon dispatch.