The Morrisons owned some
property in Florida that they were interested in selling to Thoelke.
Thoelke mailed a contract
for the sale of the property to the Morrisons in Texas. Then the
Morrisons signed the contract and sent it back to Florida.
After mailing the contract
back but before Thoelke received it, the Morrisons changed their mind and
called to repudiate the contract so they could sell the land to someone
else.
The Morrisons sued to quiet
title in order to try to prevent
Thoelke from selling the property.
Morrison argued that a
renunciation prior to receipt of the acceptance voids the acceptance.
Basically, acceptance is
complete only upon receipt of the
mailed acceptance.
Thoelke argued the
acceptance was effective when the letter of acceptance was put in the
mailbox.
Quiet title is a property term that means that the title
to the property has some confusion to it, and they can't sell the
property or borrow on it while there is this confusion.
The Trial Court found for the
Morrisons. Thoelke appealed.
The Trial Court found that
that the repudiation was effective,
The Appellate Court reversed
and found in favor of Thoelke.
The Appellate Court found
the contract is regarded as made at the time and place that the letter of
acceptance is put into the possession of the post office.
An acceptance is effective
upon mailing and not receipt.
The Court found that there
must be a point in time when a contract is complete. The acceptance was
manifested at the point of depositing in the mail.
This is known as the mailbox
rule.
It is efficient to establish
a "bright line" hard-edged rule for the sake of efficiency.
This is satisfied by making acceptance effective at the time the envelope
goes into the mailbox.
Every State in the US follows
the mailbox rule.
The mailbox rule is very rigid. It is effective even if the
letter is lost in the mail!
The mailbox rule has also been applied to telegrams and faxes.
Remember, you can write
anything you want into a contract, including a provision that that an
acceptance is only valid when received, but you have to explicitly state
that.
The mailbox rule is
counterintuitive, since everything else in contract law is effective on
receipt, not on delivery.
