The date and time an offer is accepted if that acceptance is communicated electronically has been confirmed in an amendment to the Electronic Transactions Act 2002.
The Electronic Transactions (Contract Formation) Amendment Bill, recently passed and soon to receive the Royal Assent, will amend the Electronic Transactions Act 2002 to confirm that, where acceptance of an offer is communicated electronically, the relevant date and time of the acceptance for the formation of the contract is when the acceptance is received.
This contradicts the longstanding postal rule that acceptance of an offer communicated by post is deemed to be at the date and time the acceptance is posted (i.e. sent rather than received). The postal rule originates from a judgment of the King’s Bench in 1818 – Adams v Lindsell (1818) 106 ER 250, obviously well before electronic communication was possible, let alone commonplace.
With electronic communication via email becoming much more common, it is very important to know when a contract is formed by way of acceptance of an offer. Some cases we have been involved in have involved a close analysis of the timing of key correspondence to determine whether a contract was in fact formed by a certain date. The amendment to the Electronic Transactions Act 2002 will remove any arguments surrounding when offers are electronically accepted and a contract therefore formed.
For further information, or to discuss, please contact one of our team or send an email to info@parkerandassociates.co.nz.