BetterLawNotes-5 (2)

CONTRACT LAW

The basic rule is that communication takes effect when received by the offeror.

Entores v Miles Far East Corporation [1955] 2 QB 327 (CA)

C, in London, made an offer by telex to buy 100 tons of copper cathodes from D, in Amsterdam. D accepted the offer by telex. There was subsequently a dispute as to where the contract was formed. The Court of Appeal held that where a contract is made by instantaneous communications, it is only complete when the acceptance is received by the offeror. So here the contract was made in London.

Telex was a network-based system for communicating text messages. Telex machines were largely replaced by the fax machine (itself now largely redundant in the age of email). The principle in Entores was applied by the House of Lords in the Brinkibon case.

Brinkibon Ltd v Stahag Stahl und Stahlwarenhandels GmbH [1983] 2 AC 34 (HL)

Following negotiations for the sale of a quantity of steel bars, B, an English company, sent an acceptance by telex from London to Vienna of S’s offer. S failed to perform the contract and B brought an action in the English courts for damages. An issue arose as to where the contract had been formed. The House of Lords, applying Entores, held the contract was formed in Austria.

In some cases, there may be uncertainty as to when an acceptance is received. Is a posted letter of acceptance received by the offeror when the letter is put through his letterbox or when he picks it up from the doormat and opens and reads it an hour later?

The Brimnes [1975] QB 929 (CA)

A telex arrived at the defendant’s offices on a working day at 5.45 pm. The defendant argued that the Court should treat the telex as having been received when it was seen by the defendant’s staff the following morning. The Court of Appeal, however, upheld the judge’s conclusion that the telex was to be taken as having been received by the defendant at 5.45 pm.


‘If a notice arrives at the address of the person to be notified, at such a time and by such a means of communication that it would in the normal course of business come to the attention of that person on its arrival, that person cannot rely on some failure of himself or his servants to act in a normal businesslike manner in respect of taking cognisance of the communication so as to postpone the effective time of the notice until some later time when it in fact came to his attention.’ (Megaw LJ at 966-967).

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