Entores Ltd v Miles Far East Corporation
Encyclopedia
Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3 is a landmark English Court of Appeal
decision in contract law on the moment of acceptance
of a contract over telex
. Denning LJ 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.
-based trading company that sent an offer by telex for the purchase of copper cathodes 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.
Court of Appeal of England and Wales
The Court of Appeal of England and Wales is the second most senior court in the English legal system, with only the Supreme Court of the United Kingdom above it...
decision in contract law on the moment of acceptance
Offer and acceptance
Offer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties. Agreement consists of an offer by an indication of one person to another of the offeror's willingness to enter into a contract on certain terms without...
of a contract over telex
Telex
Telex may refer to:* Telex , , a communications network** Teleprinter, the device used on the above network* Telex , a Belgian pop group...
. Denning LJ 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.
Facts
Entores was a LondonLondon
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
-based trading company that sent an offer by telex for the purchase of copper cathodes from a company based in Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...
. 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.See also
- Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbHBrinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbHBrinkibon Ltd v Stahag Stahl [1983] 2 AC 34 is a leading decision of the House of Lords on the formation of a contract using telecommunication. The Lords largely accepted the earlier leading decision of Entores v Miles Far East Co. [1955] 2 QB 327 on acceptance via telex.-Facts:Brinkibon was a...
- The BrimnesThe BrimnesTenax Steamship Co v Owners of the Motor Vessel Brimnes [1974] is an English contract law case on agreement. It decided that communication of withdrawal of an offer by telex is effective when it could be read, rather than when it is in fact read....