Contract law cases: Household Fire and Carriage Accident Insurance Co. v Grant (1879)

In Household Fire and Carriage Accident Insurance Co. v Grant (1879), Mr. Grant offered to buy shares in Household Fire and Carriage Accident Insurance. The company accepted the offer and allotted him the respective shares and sent him a letter informing him of this. The letter was lost in the post and Mr. Grant was not notified of the acceptance. In the meantime, Mr. Grant’s dividends were credited to his account.

Household Fire and Carriage Accident Insurance subsequently went bankrupt and the liquidators requested that the Mr. Grant make the outstanding payments on his shares. Mr. Grant refused.

It was held that there was a valid contract in place. The post office is such a common agent that as soon as the letter of acceptance makes it to the post office, the contract is concluded. It is as good as a messenger putting the letter of acceptance in the hands of the offeror.

Copyright © 2019 by Dyarne Jessica Ward

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