A contract by telegram is complete when the acceptance by telegram is forwarded (infra, sec 27).

1 Thayer v. Ins. Co., 10 Pick. 326 ; Bryant v. Booze, 35 Ga. 438; supra, sec 17.

made when it comes to his knowledge." But according to the above, communication by letter would never be complete, where there is a telegraph by which the letter could be countermanded, until the delivery of the letter, since till then the letter would not be out of the power of the sender. That this, however, was not intended, appears by the following illustration annexed: "B. accepts A.'s proposal by a letter sent by post. The communication of the acceptance is complete as against A. when the letter is posted; as against B. when the letter is received by A."-That a contract does not become binding until the acceptance of the proposal comes to the knowledge of the proposer is maintained by Hasse,1 Wachter,2 Bekker,3 Wuirth,4 Mittermaier,5 Seuffert,6 and Arndt.7 Other high authorities argue that a contract is complete on acceptance, some, however, holding that it is sufficient if the acceptance be declared in any way {e.g. writing the letter of acceptance), while others hold that it is necessary that the letter of acceptance should have arrived at its place of destination, though not as yet known to the person sending the proposition.8 The first of these theories has been called the reception or recognition theory, the other the declaration theory. Between these two theories several intermediate positions have been taken. Keller asserts that there can be no fixed rule, but that each case must be governed by the general rule of bona fides. Bluhme9 concedes that the contract is closed as soon as the acceptor puts the accepting letter in the post, and gives the proposer the right of recall down to this point, but gives to the acceptor the right to recall his acceptance at any time before it reaches the proposer. Windscheid1 distinguishes between cases where the proposal emanates from the future debtor and those in which it emanates from the future creditor. The first is complete on acceptance; the second is to be regarded simply as a question addressed to the future debtor, in which case it is necessary that the answer should reach the person putting the question.- Vangerow, in discussing the above theories, justly remarks that, unless a proposal is made in definite terms, and in such a shape that an answer of simple acquiescence would form a contract, it is merely tentative, and cannot bind the proposer until the action of the other party is made known to and accepted by him. Supposing, however, a true proposal, in the above sense, be made, then he argues that the contract does not come into existence until the acceptance of the proposal is made known to the proposer. A contract does not exist, until the minds of the parties unite as to a specific act, and to this it is a prerequisite that each knows what the other's mind on the negotiation between them is. This is settled in cases where the parties negotiate face to face ; as when one party accepts in a language the other party does not understand ;2 and where the party to whom the acceptance is made is deaf, so that he cannot hear it.3 The same rule applies to contracts between absent parties. Even supposing an answer accepting a proposal be rightly posted; even supposing it has arrived at its destination ; yet, until it has been read by the party addressed, there is no concurrence of minds as to the specific act. It is true that to this view it is objected, that, if it is essential to the contract that the proposer should have notice of its acceptance, then it is also essential to the contract that the existence of this prerequisite should be made known to the acceptor; and so on forever, so that on this theory no contract could be ever complete. But according to Vangerow, since a proposer is bound by his proposal, so far as concerns the other party, until it is withdrawn, and since in the case before us there has been no withdrawal down to the time of the reception of the acceptance by the proposer, then at that time the minds of both contracting parties meet in consent, and the contract is complete.

1 Rhein. Mus. ii. p. 371.

2 Ziv. Arch. xix. p. 116.

3 Jahr. ii. p. 342.

4 Des principes de droit qui regissent les lettres, missives, etles telegrammes.

5 Ziv. Arch. xlvi. p. 12.

6 sec 256.

7 sec 231; see Vangerow, sec 603. To the same effect, see Merlin, Repertoire, Vente, sec 1; Troplong, Vente, i. No. 22; Pardessus, Dr. Com. No. 250; Masse, Dr. Com. No. 578 ; Fiore, Dr.

int. pr. sec 247; cited Wh. Con. of L. sec 421; Merlin, cited Lang. Cas. Cont. i. 156.

8 Wening-Ingenheim, Ziv. Arch. ii. 25 ; Serafini, il telegrafo in relazione alla giurisp. civ. e commerc. ; Hepp, de la correspondence privee postele ou telegraphique, 1864; Muhlenbruch, sec 331; Puchta, sec 251 ; Sintenis, sec 96 ; Savigny, Syst. viii. 235 ; and other authorities cited by Vangerow, ut supra.

9 Ency. Abth. ii. sec 266.

1 Pandekt. sec 306.

2 sec U. de V. 0. (3, 15).

3 L. I. sec 15, de O. ot. A. (44, 7).

A class of cases, however, is excepted in which the proposition is so much to the advantage of the party addressed that a formal acceptance is assumed. In such cases the proposer, according to Vangerow, may be supposed to know of the acceptance without notice, and hence the contract is closed on mere acceptance. It is,however, conceded by Vangerow that, though the proposer is not bound contractually until he is advised of the acceptance of his proposal, yet, if he has, by his proposal, given the party addressed the right to expect that a contract will be executed; and if he (the proposer) backs out before notification of acceptance, in such a way that the other party suffers injury, he is bound to compensate for this injury. This liability, however, ceases, when the time is expired within which an acceptance could be expected.-But it is not disputed by Vangerow that it is within the power of a party to agree to bind himself on the posting of a reply ; and his admission of liability for negligence on the part of the proposer is based on this concession. The question then is, was there such a promise made by the proposer? If it was, it binds, for the reasons above given. Whether in point of fact such a promise was made is to be determined by the proposal itself, as interpreted by its own context, by the prior dealings of the parties, and by the general course of business at the time. And if the law in any particular jurisdiction be settled to be that posting a letter of acceptance is an acceptance, then promises made in such jurisdiction are presumed to be made subject to such law.1 sec 19. It has been said both in England2 and in this country,3 that the proposer is bound by an acceptance when duly posted, on the ground that the post-office is constituted by him his agent for this purpose. But this cannot now be sustained. An agreement to constitute A. as my agent to receive letters cannot be inferred merely from my appointing him my agent to carry letters. If it could, it would apply to all other modes of delivering letters, and would make it impossible for me to give a letter to an express agent or even to an errand boy without making the messenger an agent to receive as well as to deliver. If good as to messengers, it would be good as to all other forms of agency, and the distinction between special agents and general agents would be obliterated. There is no agency, therefore, to be implied from the mere fact of giving a party a letter to deliver. When, however, the post-office, and the telegraph office, are the usual modes of doing business, and when by local law or local usage an acceptance posted or telegraphed is regarded as adequately communicated, then, in all cases in which a proposal does not designate the mode of acceptance, it may be regarded as implying, that the acceptance will be good if sent by post or telegraph. The risk is one the proposer himself takes.1-As we have already.seen,2 the proposer, on the question of time of answer, is bound by his proposal according to its terms. If it contains no limit, then, according to the course of business by which it is to be interpreted, an answer posted or telegraphed to him in reasonable time binds him. If the proposal requires an answer by return mail, then an acceptance put off for two days is too late.3 sec 20. So far as concerns the mode in which the acceptor's obligation is to be construed, and in which it is to be performed, the place from which the acceptance is sent is that which supplies the governing law.4 It is at this place that the purposes of the parties for the first time coalesce. The same rule applies where the proposition is made not in writing, but through a messenger, and where a written contract signed by one party is forwarded to be signed by the other, and where a bill or promisory note is submitted to a party for his signature. In each of these cases, the place where one party assents to the other's proposition is the place of contract, so far as the particular transaction between the two parties is concerned. And if from this and other circumstances we can infer that the place of such acceptance was regarded by the parties as the place where the matter was to be determined, then the law of such place is the lex loci contractus, and is also the lex loci solutionis, so far as concerns the acceptor's liability.1 At the same time while the admission of a debt contained in a letter is sufficiently made at the place of posting, it is continuous in its effect until it reaches its destination, and may be considered as also made there.2 So far, however, as concerns the mode of performing a contract, the law to which it is subject is the law of the place of performance.3-The performance of the contract is to be in the place assigned by the contract,4 though when no place is designated, it is to be inferred from all the circumstances of the case.5

Rule depends on terms of proposal, not on implied agency.

1 See Wh. Con. of Laws, sec 418 et seq.

2 Hebb's case, L. R. 4 Eq. 9.

3 Tayloe v. Ins. Co., 9 How. 390.

Place of acceptance of proposal is place of contract.

1 See cases cited supra, sec 18 ; Abbott v. Shepherd, 48 N. H. 14 ; Mactier v. Frith, 6 Wend. 103 ; Northampton Ins. Co. v. Tuttle, 40 N. J. L. 476. On this topic see examination of cases in Pollock, Wald's ed. 15 et seq.; Wald's note, ib. 18 ; Langdell's Cases on Cont. 933 et seq.; 22 Alb. L. J. 424.

2 Supra, sec 9, 15.

3 Longworth v. Mitchell, 26 Oh. St. 234; Maclay v. Harvey, 90 111. 525 ; See supra, sec 15, and prior cases in this section.

4 As to place of performance, see infra, sec 871.