Bob in Burnaby called Ed in Toronto and offered to sell him 40 kilograms of smoked salmon at $15 per kilogram. He requested that Ed phone him back by noon the next day. That way, Bob could offer it to someone else if Ed wasn't interested. Instead of phoning, Ed sent a letter of acceptance, in which he said that he would have his agent pick up the fish. On these facts, which of the following is False?
A) If using the mail was unreasonable, the acceptance could not be effective until it was received.
B) If using the mail was unreasonable, the acceptance was effective when it was mailed.
C) The place of formation of the contract, if there was one, was Burnaby if the use of the mails was unreasonable.
D) The place of formation of the contract, if there was one, was Toronto if the use of the mails was reasonable.
E) Although a response by phone was requested, a response by mail would be effective if received before noon the next day.

Question

Quizplus · Accepted Answer

This is a mailbox rule question. The mailbox rule states that an acceptance is effective upon dispatch (i.e. when it is mailed or sent). Therefore, if using the mail was unreasonable, the acceptance would still be effective upon dispatch. The place of formation of the contract depends on where the acceptance was effective, which in this case would be Toronto. Choice A is false because the mailbox rule applies even if using the mail was unreasonable. Choice C is partially correct, but incomplete because it only applies if the use of the mail was unreasonable. Choice D is correct, but incomplete because it only applies if the use of the mail was reasonable. Choice E is irrelevant because the letter of acceptance was sent, not received.

Bob in Burnaby Called Ed in Toronto and Offered to Sell