Appellants executed a contract for purchase of property owned by Appellees in Orange County, Florida and mailed to the Appellees in Texas. The Appellees then executed the contract and mailed it, but cancelled and repudiated the contract before it was received by Appellants. The Appellants then recorded the contract, anyway.
Under the deposited acceptance (or mailbox) rule, a contract is formed upon deposit of the acceptance in the mail.
The Appellants recorded the contract in spite of the Appellees’ repudiation after mailing. The lower court held for the Appellees on the rationale that the contract was repudiated prior to receipt by the Appellants, so there was no legal contract binding on the parties.
Was a contract formed when the Appellees mailed their acceptance?
Yes. Reversed and remanded.
· An acceptance is effective upon mailing, and not upon receipt.
· A valid contract was formed when the Appellees mailed their acceptance, and their repudiation prior to receipt of the acceptance by the Appellees constituted a breach of contract.
· The justification for the deposited acceptance rule proceeds from the premise that there must be, both in practical and conceptual terms, a point in time when a contract is complete.
As a matter of public policy, the rule throwing the risk of loss on the offeror has the merit of closing the deal more quickly and enabling performance more promptly.