Holwell Securities Ltd v Hughes [1974] 1 WLR 155

Material Facts:

The defendant, Dr Hughes, offered to sell his property to the claimant Howell Securities Ltd. It was contained in the offer that acceptance had to be “by notice in writing” and was to be done within six months. The claimant posted a letter accepting the offer five days before the stipulated expiration period, but this letter was lost in the post. The defendant refused to go through with the contract and the claimant sued for specific performance.

Issue;

1. Whether or not the postal rule applied when Holwell posted their acceptance letter.

Holding;

It was held that the postal rule did not apply.

Ratio Decidendi;

The court ruled that the offeror had clearly stated how acceptance should be communicated, which was by notice in writing. "Notice in writing" was interpreted to mean the offeror must be notified of the offeree's acceptance, which required an actual receipt of the acceptance letter. Thus, the postal rule was thus said to not apply when the offeror communicates that acceptance has to be received by the offeror.