Entores Ltd v Miles Far East Corporation

"Entores Ltd. v. Miles Far East Corp.", [1955] 2 QB 327 is a landmark English Court of Appeal decision in contract law on the moment of acceptance of a contract over telex. Lord Denning found that the regular postal rule did not apply for instantaneous means of communications such as a telex. Instead, acceptance occurs where the message of acceptance is read.

Background

Entores was a London-based trading company that sent an offer for the purchase of copper cathodes by telex from a company based in Amsterdam. The Dutch company sent an acceptance by telex. The contract was not fulfilled and so Entores attempted to sue the owner of the Dutch company for damages. The controlling company, Miles Far East Corp, was based in the US and under English law Entores could only bring the action in the US (serve notice of writ outside the jurisdiction) if it could prove that the contract was formed within the jurisdiction, i.e. in London rather than Amsterdam.

Judgment

Denning LJ, delivering the leading judgment. He said that the postal rule could not apply to instantaneous communications, such as telephone or telex: if a phoneline "went dead" just before the offeree said "yes", it would be absurd to assume that the contract was formed and the parties would not have to call each other back. The same applied to telex. Since the contract was therefore only formed when and where the telex was received, the place of formation was London.

In an obiter Denning LJ stated that this would only be otherwise if the acceptance was not received through the fault of the offeror, for example if there was no ink in his telex machine. In such a case, if the offeror did not bother to ask for a repeated message, he would be estopped from saying that he did not receive.

ee also

* "Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH"

External links

* [http://law2.biz.uwa.edu.au/lproksch/Cases/Entores.htm summary]