Parer v Carlton

The High Court of Australia considered a dispute between Parer and Carlton concerning the validity of a notice of intention to exercise an option to purchase land. The central issue was whether the notice, which was posted by ordinary mail, was effective to exercise the option, or if it required personal service or some other form of communication.

The court was required to determine the proper construction of the option clause within the relevant contract. Specifically, it had to ascertain whether the clause stipulated a particular method for the exercise of the option, and if not, what the common law requirements were for the effective communication of an intention to exercise such an option. The court also considered the implications of the postal rule in contract law.

The High Court held that the option clause did not specify a method of communication for exercising the option. In the absence of such a stipulation, the common law requires that the intention to exercise the option must be communicated to the optionor. The court affirmed that the postal rule, which deems a letter posted to be effective upon posting, applies only when it is reasonable to use the post for communication. In this instance, the court found that posting the notice by ordinary mail was not a reasonable method of communication, and therefore, the notice was not effective to exercise the option.

The High Court allowed the appeal and ordered that the judgment of the Supreme Court of Queensland be set aside. The court declared that the notice of intention to exercise the option was ineffective and that the option had not been exercised.