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The Significance of Adams v Lindsell
Adams v Lindsell , decided two centuries ago, is well-known as a source of what we now call the ‘postal acceptance rule’: the rule that a contract entered through postal correspondence is concluded when the offeree posts his letter of acceptance, rather than when the offeror receives the letter.^1 This rule is often thought to be an exception to the more general principle that a contractual agreement is concluded when the offeree’s acceptance is communicated to the offeror. The Adams case is also well-known for its statement of a certain paradox—an infinite regress—that would supposedly arise if the law did require receipt of acceptance in order to complete a postal agreement. On one common view of the paradox stated in Adams v Lindsell , it does not pose an especially difficult puzzle for our understanding of contract law. According to this view the paradox arises if one seeks to apply, in the postal context, a theory of contractual agreement that most lawyers today would in any event regard as outdated and implausible: a certain version of the so-called ‘meeting of the minds’ or ‘consensus ad idem’ theory. The paradox can be avoided, it is thought, by abandoning or modifying that implausible theory of agreement. For example, by adopting some version of an objective approach to contract formation. Notably, given this common view, the resolution of the paradox in Adams does not actually justify the rule of law for which the case has come to stand—the ‘postal acceptance rule’. Replacing the ‘meeting of the minds’ theory with an objective approach to agreement, for example, does not in itself tell us at what point a postal agreement is concluded. Consequently, if we seek a rationale for the postal rule we must look elsewhere. While a number of rationales have been proposed by courts and commentators over the centuries since Adams , each is subject to significant objections. This has led some to conclude that the postal rule must be largely arbitrary. (^1) (1818) 1 B & Ald 681; 106 ER 250. The 1818 case of Adams v Lindsell states a paradox concerning the formation of contractual agreements. On one common view, the paradox is designed to show that, at least in certain circumstances, a full-blown ‘meeting of the minds’ theory of agreement is impracticable. The present article advances an alternative view of the Adams paradox, on which it has somewhat different implications for our understanding of contract law. On this view, the paradox strikes at a certain form of methodological individualism in our thinking about contractual agreement, which is problematic regardless of whether we seek a ‘meeting of the minds’. Reflection upon this version of the Adams paradox may enhance our understanding both of contractual agreement generally and of the special rules governing the formation of contracts inter absentes.
The present article develops an alternative view of the Adams paradox, on which it has somewhat different implications for our understanding of contract law. On this view the paradox does not strike only an implausible ‘meeting of the minds’ theory of contractual agreement. Hence the paradox cannot be avoided just by abandoning or modifying such a theory, for example by adopting an objective approach. Furthermore, on the view advanced here, the Adams paradox does not afflict only contracts that are concluded by post. The paradox is at least latently present in all cases of contract formation—even where parties contract face to face. Resolving the paradox therefore requires us to reconsider some quite fundamental and general assumptions about the nature of contractual agreement. The resolution of this alternative version of the paradox also, the article will suggest, yields at least the outline of a satisfactory account of the ‘postal acceptance rule’. We can come to see that the postal rule is not arbitrary, and indeed, that the various justifications courts and commentators have proposed for the rule over the years, though not fully satisfactory, contain important grains of truth. The common view of the Adams paradox and its resolution, and the alternative view to be developed here, each comprise a complex constellation of thoughts about the character of contractual agreement. Almost every aspect of each of these views is highly contestable. The article does not seek to show that the common view is untenable. Nor that the alternative view is inescapable. Certainly, the article does not seek to rule out many other possible understandings of the Adams paradox, and of contractual agreement more generally, which are not captured by either of the views discussed here. The article seeks only to bring out, by way of contrast to a common existing view, an alternative understanding of Adams that is not wholly implausible, and which has potentially interesting theoretical ramifications. The article’s overall argument may be characterised as an exercise in interpretive legal theory.^2 Adams v Lindsell provides the occasion for discussing a certain conceptual or philosophical problem, reflection on which illuminates both the particular rules governing postal contracts and our more general understanding of contractual agreement in the common law. The main aim of this exercise in interpretive theory is to improve our understanding, rather than to change the law. Much of the discussion will be at a more abstract level than usually appears in doctrinal analysis. However, the discussion may also have some implications for (^2) S A Smith, Contract Theory , Oxford University Press, Oxford, 2004 , p 5. It is also a contribution to the literature on legal and contractual paradoxes. See eg George Fletcher, ‘Paradoxes in Legal Thought’ (1985) 85 Colum L Rev 1263; Richard Bronaugh, ‘A Secret Paradox of the Common Law’ (1983) 2 Law & Philosophy 193; also notes 51 - 52 below.
The Court said, that if that were so, no contract could ever be completed by the post. For if the defendants were not bound by their offer when accepted by the plaintiffs till the answer was received, then the plaintiffs ought not to be bound till after they had received the notification that the defendants had received their answer and assented to it. And so it might go on ad infinitum. The defendants must be considered in law as making, during every instant of the time their letter was travelling, the same identical offer to the plaintiffs; and then the contract is completed by the acceptance of it by the latter. Then as to the delay in notifying the acceptance, that arises entirely from the mistake of the defendants, and it therefore must be taken as against them, that the plaintiffs’ answer was received in course of post. That is the entirety of the court’s reported reasoning. Despite, and indeed because of, the Adams case’s brevity, it is not easy to understand fully. Fortunately, this article does not aim to offer a comprehensive understanding of the case, let alone of its position in the intellectual history of the common law of contract. Certainly, the aim here is not to establish what the Adams court, the lawyers, or the parties were necessarily thinking at the time. Instead, the article will focus very selectively on a particular part of the court’s reasoning—the paradox or infinite regress problem presented in the ‘ ad infinitum ’ passage—and consider some possible contemporary interpretations of it, in order to draw out its potential implications for our theoretical understanding of contractual agreement today.
An existing view of Adams
The paradox
On one common interpretation, the paradox stated in Adams v Lindsell is not especially troubling at least for lawyers today, because it undermines a theory of contractual agreement that is now widely regarded as obsolete: a specific version of the so-called ‘meeting of the minds’ or ‘consensus ad idem’ theory, which requires the parties to reach a simultaneous alignment of certain subjective mental states. In particular, the paradox is thought to undermine the theory that the making of a contractual agreement requires each of two parties to possess, at a single moment in time, an intention to undertake a proposed deal, coupled with knowledge that the other party shares that intention.^7 (^7) Articulations of this kind of view include Lobban, above, n 3 , pp 335-6; A W B Simpson, ‘Innovation in Nineteenth Century Contract Law’ (1975) 91 LQR 247 at 261; David Marshall Evans, ‘The Anglo-American Mailing Rule’ (1966) 15 ICLQ 553 at 571; Horst K Lucke, ‘Striking a Bargain’ [1962] Adel L Rev 293 at 309 n 115; Asher Kahn, ‘Contracts by Correspondence’ (1959) 6 McGill LJ 98 at 104; Clarence D Ashley, ‘Formation of Contract Inter Absentes ’ (1902) 2 Colum L Rev 1 at 3; C C Langdell, A Summary of the Law of Contracts , Little Brown & Co, Cambridge, Mass, 2nd edn, 1880, p 19.
An especially lucid articulation of this view can be found in perhaps the most renowned contemporary article on the postal acceptance rule, by Simon Gardner. Gardner’s interpretation of the Adams paradox is worth setting out in some detail. He begins by quoting the court’s ad infinitum passage and proceeds to offer his interpretation:^8 The court decided that [the acceptance] took effect on posting. If it were effective only on delivery, they said, ‘no contract could ever be completed by the post. For if the defendants were not bound by their offer when accepted by the plaintiffs till the answer were received, then the plaintiffs ought not to be bound till after they had received the notification that the defendants had viewed their answer and assented to it. And so it might go on ad infinitum ’. It is easy to see what the court is getting at here. The defendants’ argument was essentially that for a contract to arise there must be consensus ad idem : each party must simultaneously contemplate the same deal and know that the other shares that contemplation. In the context of the case, the defendants ceased to be in consensus once they thought there was no letter coming from the plaintiffs and sold the wool away. The court’s reference to the prospect of an infinity of letters is aimed at rejecting the very foundation of this argument. It observes that the exigencies of doing business at a distance with non-instantaneous means of communication make the consensus model impracticable, even if it were otherwise attractive. For Gardner, then, the court’s ad infinitum passage raises a difficulty for a particular version of the ‘meeting of the minds’ theory: the notion that the parties ‘must simultaneously contemplate the same deal and know that the other shares that contemplation’. The court’s reasoning shows that this theory is impracticable in certain special circumstances, namely, where two parties are communicating ‘with a non-instantaneous means of communication’, such as the post. While parties communicating face-to-face or by other instantaneous means could presumably reach a point at which they both simultaneously contemplate the same deal and know that the other shares that contemplation, parties using a delayed means of communication, Gardner observes, can never ensure such a result. Any attempt to do so will be futile and produce only an infinite sequence of letters, because something like the following series of events will occur. When the offeree accepts, he will inform the offeror by sending a letter to that effect. However, by the time that letter arrives with the offeror, she may well have changed her mind about the deal (as in Adams ), in which case there is obviously no consensus. Moreover, even if the offeror does still wish to proceed, upon receiving the offeree’s letter she merely has notice of the offeree’s state of mind at a prior point in time—and in the meantime, the offeree may have changed his mind. Perhaps, then, the offeror might try sending another letter to the offeree, confirming that she still wishes to proceed with the deal and seeking the (^8) Gardner, above, n 4 at 171.
knowledge that a reasonable person in their shoes would possess. This would in fact allow the law, were it so inclined, to achieve a sort of ‘meeting of minds’ occurs—a point at which the parties could be taken to ‘simultaneously contemplate the same deal and know that the other shares that contemplation’— objectively speaking. The offeror would post her offer letter, from which point her intention to embark on the proposed deal would be taken to persist for a reasonable time. When the offeree received the letter, and sent back a letter of acceptance, he could be reasonably taken to know of the offer and to be assenting to it. Furthermore, his state of mind would be taken to persist for a reasonable time. Then, when the offeror received the offeree’s letter within a reasonable time, she could be reasonably regarded as continuing to intend the proposed deal, and as possessing knowledge of the offeree’s (objectively persisting) state of mind. Thus, the law could reach a point where—objectively speaking—both parties simultaneously contemplate the same deal and know that the other does too. Arguably the notion of an objectively persisting mental state, such as intention or knowledge, is just a straightforward application of the familiar objective approach that appears in contract law more generally, whereby each party’s conduct is interpreted from the standpoint of a reasonable person. However, for some commentators—Brian Simpson is a prominent example—the notion of an objectively persisting mental state is a ‘fiction’. It is an intellectual device designed to allow us to find, in a context such as postal contracting, the moment of simultaneous consensus required by the ‘meeting of the minds’ theory. The fiction allows us ‘to reconcile the realities of life with the requirement of the dogma’.^13 Someone who holds this view might prefer simply give up on the idea that any simultaneous coincidence of the parties’ mental states is required.^14 Instead, the law could hold that it is sufficient for parties to express their (objectively construed) intentions, and reach the requisite states of (imputed) knowledge, successively—without there being any moment of overlap. Finally, a more radical departure from the ‘meeting of the minds’ theory might hold that the law should not consider the parties’ mental states at all—even construed from the standpoint of a reasonable person. Instead, like Oliver Wendell Holmes in his more combative moods, we might contend that contractual formation should be based purely on overt behaviours or events.^15 On this approach, we might regard, say, the posting of a letter, or the same identical offer to the plaintiffs’.) This construal of the offer might be extended to all of the parties’ communications. (^13) Simpson, above, n 7 at 261. (^14) Though others would resist this approach, eg Lucke, above, n 3 ; H K Lücke, ‘Simultaneity and Successiveness in Contracting’ [2007] European Rev Private Law 327. (^15) O W Holmes, ‘The Path of the Law’ (1897) 10 Harv L Rev 457 at 463-4.
delivery of the letter to the recipient’s place of residence, as legally significant in themselves regardless of what mental states they might be taken to evidence. On this approach, the paradox that arises for a ‘meeting of the minds’ theory will of course not trouble us. In sum, there are a number of approaches one could potentially take to avoiding the paradox that seems to arise, in the postal context, if one seeks to establish a full-blown ‘meeting of the minds’. Although 1) abandoning the knowledge requirement is not a very satisfactory solution, the law could 2 ) adopt an objective approach, which might mean construing the parties’ intentions, knowledge, or other mental states, from the standpoint of a reasonable person, or 3 ) simply rejecting any investigation of the parties’ mental states whatsoever. The law could also 4) discard the simultaneity requirement. Or adopt some combination of those approaches. Whatever course is taken, the paradox seems relatively easy to avoid, in that doing so is not an especially difficult intellectual endeavour at least for those modern lawyers who have no deep commitment to a ‘meeting of the minds’.
Rationales for the postal acceptance rule
Notably, given the understanding of the Adams paradox just outlined, its resolution does not actually justify the rule of law for which the Adams case has come to stand: the ‘postal acceptance rule’. This is because the ‘meeting of the minds’ paradox can be avoided by any approach to contract formation that discards the requirement of a simultaneous subjective mental consensus whereby each of the parties knows that the other intends the proposed deal. For one thing, the adoption of an objective approach whereby the parties’ mental states are construed from the standpoint of a reasonable person, does not in itself tell us at what point a postal contract should be concluded—when the offeree objectively expresses his assent, when the offeror receives reasonable notice of that assent, or at some other point. A fortiori , abandoning a search for mental states altogether, and focusing only on overt actions or events, does not tell us what should be the decisive action or event. Nor does abandoning the simultaneity requirement itself decide at what point the contract is concluded. Hence, as Gardner observes, while the Adams court chose the point of posting as the crucial moment, ‘its reported reasoning does not require this choice’—since ‘an infinity of letters would be avoided by any rule’ of contract formation that does not require a full-blown meeting of the minds.^16 (^16) Gardner, above, n 4 at 171. To similar effect see eg Evans, above, n 3 at 558 - 9; E Peel, Treitel on the Law of Contract , Sweet & Maxwell, London, 13th edn, 2011, para 2-031.
Perhaps the offeror impliedly authorises —agrees to^25 or assumes the risk of^26 —acceptance by post? Again this seems artificial. An offeree requires no special authorisation to accept a contract by post—he may choose any reasonable means of communication he likes. The only effect of the supposed implied authorisation we are contemplating, then, is to render the offeree’s acceptance effective at the point of posting. One could be forgiven for suspecting that such an authorisation ‘will obviously be implied only when the tribunal considers that it is a case in which this result ought to be reached’.^27 What about fairness : surely it is only fair to allow the offeree to rely on the efficacy of his acceptance from the point of posting? Langdell notoriously responded that fairness is irrelevant in this context.^28 More persuasively, he pointed out that any enhancement of fairness from the standpoint of the offeree is counterbalanced by prejudice to the offeror, since the postal acceptance rule imposes a contract upon her before she can know of its existence.^29 Thus, the decision whether to adopt the postal acceptance rule, as opposed to a rule of receipt, is a wash so far as fairness is concerned. ‘Adopting one view, the hardship consists in making one liable on a contract which he is ignorant of having made; adopting the other view, it consists in depriving one of the benefit of a contract which he supposes he has made.’^30 Finally there is Gardner’s own theory: an historical ‘demasking’ of the postal rule. On this approach, the rule is explained by a peculiar historical context and so is perhaps ‘something of a museum piece’.^31 Gardner links the rule’s development to the introduction of the uniform penny post, together with three other advances that occurred around 1840: prepaid postage, ‘the self-adhesive postage stamp’, and ‘the cutting of letter-boxes in the front doors of houses’.^32 Taken together, these measures may have great significance. Until 1840, the delivery of a letter typically required that the addressee should manually receive and pay for it. This was not, of course, a significant practical hurdle, but it sat in symbolic contrast with the new position, whereby the sender had only to affix his stamp and post the letter, and it would go through to its destination without further subvention (^25) Household Fire [1879] LR 4 Ex D 216 at 228; Langdell, above, n 3 , p 19; Ashley, above, n 3 , p 7. (^26) Eg Kahn, above, n 3 , p 123. (^27) Henthorn v Fraser [1892] 2 Ch 27 at 33; see also Household Fire [1879] LR 4 Ex D 216 at 282 - 3. (^28) Langdell, above, n 3 , p 21. (^29) It is sometimes thought the prejudice to the offeror is a less pressing concern because she has the opportunity to exclude postal acceptance if she chooses. But that is arguably only true if the offeror is legally knowledgeable or advised about this possibility. In any case, the offeree often has an equivalent opportunity: he can choose not to use the post if he prefers. British & American Telegraph [1871] LR 6 Ex D 108 at 116. (^30) Langdell, above, n 3 , p 21. (^31) Gardner, above, n 4 at 192. The phrase appears in Rhode Island Tool Co v United States (1955) 128 F Supp 417 at 420-1, cited in Evans, above, n 3 at 571. (^32) Gardner, above, n 4 at 179 - 80.
from outside the system. So these three innovations of 1840 may be seen as predicating a radically new perception of the nature of the post: the notional equation of the posting of a letter with its delivery. They may thus have been a very powerful influence towards courts affirming the acceptance rule [in the 1840s]. Gardner tells us that this perception of the post was subsequently lost, with the advent of even better communication technologies such as the telegraph and telephone. Hence, Gardner suggests, the common law later adopted a different approach to posted revocations of offers— which, unlike acceptances, are effective only upon receipt.^33 Gardner hints that his demasking of the postal rule, and exposure of ‘the “real” reason’ behind it, is meant to be taken playfully rather than literally.^34 Still, for the avoidance of doubt we may note that Gardner’s thesis, based on developments in the postal service in the 1840s, is not easy to square with the fact that Adams v Lindsell was decided in 1818. In this way each of the proposed rationales for the postal acceptance rule turns out to be less than fully satisfactory. After surveying these and other proposals some commentators conclude the rule must be largely arbitrary.^35 It is a creature of the positive law that resolves a practical problem to which there is no inherently rational or just solution. Sometimes commentators make this point by saying that the rule is merely a convenient way to resolve a ‘coordination problem’—much like a decision about whether cars should drive on the left or the right hand side of the road.^36
Another view of Adams
This article will not seek to show that the common view of the Adams paradox just outlined is untenable. On the contrary, Gardner and others who share this view seem to have identified a genuine problem that arises if one seeks to apply a full-blown ‘meeting of the minds’ theory in the context of postal contracting. However, the article will now suggest an alternative interpretation of the Adams paradox, which is potentially interesting because it brings out some different implications for our theoretical understanding of contractual agreement. This alternative view identifies a paradox (^33) Gardner, above, n 4 at 190. (^34) Gardner, above, n 4 at 176. (^35) Though others regard this conclusion as unsatisfactory. Eg Evans, above, n 3 at 559 (‘no more than an abdication of responsibility’); Household Fire [1879] LR 4 Ex D 216 at 235. (^36) Smith, above, n 2 , pp 188, 192. See also eg Chen-Wishart, above, n 17 , p 72. On the idea of a ‘coordination problem’ see T C Schelling, The Strategy of Conflict , Harvard University Press, Cambridge, Mass, 1960 , pp 54- 8; David Lewis, Convention , Harvard University Press, Cambridge, Mass, 1969 , pp 6, 24.
so too. Yet, reflection on one’s own experience of contracting by delayed means of communication might lead one to doubt that any sane contracting party would suppose that such a moment could be achieved by means of the post. Thus, one could be forgiven for suspecting that a somewhat different assumption about contract formation—a more intuitive and less theory-laden one—might be at work here. There is indeed another, relatively straightforward reason our offerors in St Ives might have assumed they should not be contractually bound until they received notice of the offerees’ acceptance. The offerors might simply have assumed it would be unfair to bind them to a contractual agreement with the offerees before they were in a position to discover whether the offerees had agreed. Intuitively, it seems reasonable to suppose that, before an offeror can be bound to a contract, she must be put in a position to find out where stands with respect to the transaction: whether it is actually going ahead, and whether she is bound. Therefore, before the offeror is contractually bound, she must be able to discover whether the offeree has done what is required, on his part, for the parties to be in agreement. And this, one might assume, is why the offeror should be entitled to receive notice of the offeree’s acceptance before a contract is formed. Notably, support for this intuitive assumption can be found in dicta from the contractual commentary and case law right up to the present day. Often, when commentators or judges discuss the requirements for the formation of a contractual agreement, they point out that it would be unfair to bind an offeror before she is in a position to discover whether a binding contract has come into existence. Consequently, the offeror must, at least generally speaking, be entitled to receive notice of the offeree’s acceptance. Indeed, this is the reason perhaps most commonly advanced for what is often said to be the general principle of the common law of contract that communication of acceptance is required to conclude an agreement. So for example if we turn to one leading contemporary treatise we will be told that communication is generally required because ‘the offeror is entitled to know whether a binding contract has been concluded by acceptance’.^39 The case law makes the same point more vividly. Lord Denning in the Robophone case says that ‘It would be deplorable’ if an offeror were contractually bound when she does ‘not know whether or not there [is] a contract binding’ upon her.^40 Hence in that case Lord Denning concluded that the offeree, an answering machine sales firm, could not accept its customer’s (^39) Anson , above, n 17 , p 46. (^40) Robophone Facilities v Blank [1966] 1 WLR 1428 at 1432 (emphasis added).
offer merely by signing a contractual document that never left its office, and so never became available to the customer. The sales firm had to provide notice of acceptance. One could find in the case law other examples of apparently ‘deplorable’ contract formation scenarios which might result if communication of acceptance were not required. Lord Blackburn, considering the alleged formation of a coal supply contract for a railway in Brogden v Metropolitan Railway , famously rejects the notion that an offeree might accept a contractual offer merely by mentally assenting in his own mind, or by signing a contractual document but immediately locking it away in his desk drawer.^41 Surely it would be inappropriate for such an act by the offeree to bind the unwitting offeror. To give one other example, discussed in an early American law review article: an offeree presumably cannot conclude a contract just by whispering to his friends that he has done so.^42 If, say, I propose to you that we should open a café together, you surely cannot accept by whispering your answer to your other friends in the room, and instructing them not to tell me. It would be unfair to bind me contractually in this scenario. And this, one might suppose, is because the offeror must be able to discover whether her counterparty has done what is necessary for the parties to be contractually agreed. Thus, it is natural to assume that the reason a contractual offeror should receive notice of acceptance is because only then is she placed in a position to discover whether the offeree has done what is required on his part for a contractual agreement to arise. Yet now, having articulated this assumption about the position of the offeror, we must turn to consider the position of the offeree. If we are committed to even-handed treatment of the parties, we must presumably also posit that he is entitled to be placed in an equivalent position. That is, we must hold that the offeree is entitled to find out, before he is bound, whether the offeror has done what is required on her part for them to be agreed. But then, of course, a paradox looms. On this approach the formation of a contract will require an infinite sequence of communications. Our offeror sends an offer to the offeree, who assents and sends a letter of acceptance back to her. Once the offeror receives that letter, she has notice that the offeree has done what is required on his part for the parties to be agreed. Therefore she has reached the position required, on her part, for a contractual agreement. However, before the offer ee can be bound, he must receive notice that the offeror has reached that position. Therefore, our offeror must send a communication to the offeree notifying him of her receipt of his acceptance. Once (^41) (1877) 2 App Cas 666 at 692. (^42) Ashley, above, n 7 at 7.
Differences from the ‘meeting of the minds’ view
Because the alternative view of the Adams paradox just articulated differs in a number of crucial respects from the ‘meeting of the minds’ view advanced by Gardner and others, the alternative paradox cannot be so easily resolved. As an initial matter, our alternative view, unlike the ‘meeting of the minds’ view, is not committed to any knowledge requirement for contract formation. It is consistent with the alternative view to hold that the offeror need not actually know of the acceptance, but should merely be put in a position where the relevant information is in some sense available to her.^44 For example, through a written notice being hand-delivered to the offeror’s address, regardless of whether she actually reads it. Even a notice requirement of this sort will generate our paradox, because, given a commitment to even-handed treatment of the contracting parties, we will then have to say that the offer ee must receive notice that the offeror has received notice of acceptance … and so on. Relatedly, our alternative view does not presume that the parties’ mental states, such as knowledge or intention, should be construed subjectively —such that those states might change from moment to moment according to the parties’ whims. Instead, an objective construal might be appropriate. It is entirely consistent with our intuitive assumption—that each party should be placed in a position to discover whether the other has done what is required for contract formation—to hold that each must be taken to have the intention or knowledge a reasonable person in their shoes would possess. Our paradox will still arise, because if the offeror is entitled to be put in a position where a reasonable person would realise the offeree had accepted, the offeree is entitled to be put in a position where a reasonable person would realize that the offeror had reached the relevant position, and so on. Indeed, our alternative view does not necessarily assume that the law should take any interest at all in the parties’ mental states—as opposed to overt actions or events. Again, our intuitive view might require only the occurrence of a certain event, such as the delivery of a written notice to the offeror’s residence regardless of whether it influences her mental state. Our paradox will still arise, so long as we assume that the reason for insisting on this overt action or event is to confer on the offeror a certain sort of benefit: of being placed in a position to discover whether her counterparty has done what is required on his part for contract (^44) On which point see eg O W Holmes, Jr, The Common Law , Little Brown & Co, Cambridge, Mass, 1881 , p 306; ‘The Path of the Law’, above, n 15 at 464; The Brimnes [1975] QB 929; Haywood v Newcastle upon Tyne Hospitals NHS Foundation Trust [2018] 1 WLR 2073; 2018 UKSC 22.
formation. Because then, fairness would seem to require that the offeree enjoy an equivalent position.^45 Our alternative view also contains no commitment to simultaneity —to a particular moment in time at which for example the parties’ mental states, or other behaviours, align. We may suppose that the offeror’s receiving notice of acceptance need not overlap at any instant in time with the offeree’s acceptance, but rather may be obtained subsequently. Still, the offeree will then need to obtain notice of the offeror’s receipt … and so on. Our paradox arises even if all the relevant actions or events may occur successively. The upshot of all this is that our alternative paradox is not as easily resolved as the ‘meeting of the minds’ paradox. Given our intuitive assumption about what contract formation requires, it will not assist matters merely to 1) abandon a knowledge requirement, 2) adopt an objective approach, such as one employing a reasonable person standard, or indeed 3) to focus only on overt actions or events. Nor will it help 4) to give up on simultaneity. Finally, we can now also see that our alternative paradox does not arise only in the postal context, or other special contract formation scenarios. The paradox is at least latently present in all contract formation scenarios. Recall that Gardner associates the Adams paradox with practical difficulties that arise where parties are using a delayed or ‘non-instantaneous means of communication’. Because postal communications are inherently delayed, there is a danger the parties might change their mind while a communication is travelling between them. By contrast, our alternative paradox is independent of such considerations. To see this, imagine that two contracting parties can somehow transmit truly instant messages to each other, and so there is no danger that either party may change their mind while a message is travelling. (Some modern instant messaging technology may effectively approximate this condition.) When our offeree accepts, he can instantly inform the offeror, and she will instantly know that he has reached the state required on his part for a contractual agreement. The problem is that, now the offeror has received this information, the offeree must be notified that she has done so—since he cannot be bound until he is notified that she has fulfilled the requirements on her part for contract formation, which include obtaining notification of his acceptance. Of course, the offeror can send an instant message supplying the offeree with the requisite information, and when it instantly arrives the offeree will reach the state necessary, on his part, for contract (^45) Of course, if one does not assign any reason of this sort to the law’s requirement of an overt event such as the giving of notice, one can escape the paradox. But by doing so, one gives up on our initial intuitive assumption.
message to the offeree here. Instead, the offeree, at the moment he sends his own message, can reason that it will certainly be received by the offeror, and therefore, that all the requirements on her part for contract formation will be satisfied. By reasoning to that conclusion, the offeree can reach the state required on his part for a contract to be formed, without any further communication. Note, however, that the offeree’s reasoning to that conclusion is then an act required on his part for contract formation. Consequently, the offeror must be notified that the offeree has performed that act. Again, of course, no message need be sent to confer such notification on the offeror. Given that she has received the offeree’s acceptance, the offeror can reason that the offeree has reasoned himself into the knowledge that she has received it. Still, the offeror’s reasoning to that conclusion is then the last thing required on her part for contract formation. And so the offeree must be informed that it is has occurred …. A contract will never be formed.^49 Our alternative version of the Adams paradox is therefore perfectly general. It arises in all cases of contract formation—not just where parties seek to contract by special means of communication such as the post. The paradox arises regardless of whether the parties’ communications are delayed, or might fail to be delivered. It arises even where communications are instantaneous and perfectly reliable. Indeed, our paradox arises even where parties seek to contract face to face. Even two parties who are looking each other in the eyes, and communicating orally without any delay or other difficulty, will have to embark upon an infinite sequence of communications in order to reach a contractual agreement—at least, that is, if we assume that each party is entitled to acquire, before she is agreed, notice that the other party has reached the state required for them to be agreed.^50
Solution?
How could we avoid the alternative paradox identified here? To do so, we will need to ascertain the root source of the paradox, and develop a revised theoretical approach to contractual (^49) Note that it makes no difference whether the reasoning here is objectively imputed or a subjective process. For a philosophical treatment of this kind of infinite reasoning process see eg Lewis, above, n 36. (^50) For the avoidance of doubt, the claim here is not that contractual agreement between parties who are interacting face to face is in fact impossible, only that it is impossible given a certain understanding of what contractual agreement involves. Therefore there must be something wrong with that understanding. Relatedly, it is of course true that, in reality, no contracting parties would bother to work through even the initial stages of the complicated sequences of interaction discussed above. But that only confirms that there must be something wrong with an understanding of agreement which would in principle require parties to embark on such a sequence—indeed, to complete an infinite sequence—of that kind.
agreement that can avoid it. Subsequently, we can consider some potential concerns that might arise about this approach. The source of the paradox Our paradox arises because we have effectively adopted an understanding of contract formation that involves a problematic relationship of interdependence between the parties. We are assuming that what each individual party must do, to form a contract, is dependent or conditional upon the other doing what is required on their part.^51 Because each party must receive notice that the other has done what is required. Given this assumption, neither party can ever enter an agreement—we are instead trapped in an endless sequence, whereby we first seek to establish that one party has done what is required, then the other, then the first, and so on. By way of analogy, imagine two overly courteous persons, neither of whom can enter a room because each insists the other enter first—‘No, after you ’.^52 Why have we fallen into this problematic understanding of agreement, whereby what each of the parties must do, to reach a contractual agreement, is dependent upon the other first doing what is required on their part? The root source of our difficulties, it is submitted, is a certain form of what we might call ‘methodological individualism’ in our thinking about contract formation.^53 In thinking about what it takes for a contractual agreement to be concluded, we have been considering the position of each party individually, and asking what he or she can legitimately demand from the other. For example, in considering the Adams case, we first took the position of a contractual offeror—the wool dealers in St Ives—and articulated the thought that an offeror must be entitled, before she is bound, to notice that her counterparty is agreed. We then shifted to consider the position of the other party to the transaction, the offeree. Here we concluded that, if the parties are to be treated even-handedly, the offeree must have an equivalent entitlement (^51) The paradox is structurally equivalent to those discussed in the philosophical literature on agreement by Colin Radford, ‘I Will, if You Will’ (1984) 93 Mind 577; and Margaret Gilbert, ‘Is an Agreement an Exchange of Promises?’ (1993) 90 J Philosophy 627. (^52) Sometimes known as an ‘Alphonse and Gaston’ routine, after a comic strip featuring two characters prone to this kind of interaction. Note also that on this view the ‘coordination problem’ analogy is deeper than some legal commentators seem to realise. See text to note 36 above, and Schelling, above, n 36 , p 54; Lewis, above, n 36 , pp 27-34, 52-7. See further P Vanderschraaf and G Sillari, ‘Common Knowledge’ in E N Zalta, ed, The Stanford Encyclopedia of Philosophy. (^53) For the origins of this term, in the fields of economics and sociology, see Joseph Schumpeter, ‘On the Concept of Social Value’ (1909) 23 Quarterly J Economics 213. Of course there is today a multifaceted debate ranging across a number of fields concerning the meaning and appropriateness of ‘methodological individualism’. Joining such debates is beyond the scope of the present article, which merely adopts the term as a convenient and instructive label for the approach to understanding contract formation described in the text above.
