Decided 17 May 1955 | End date May 17, 1955 | |
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Citation(s) [1955] EWCA Civ 3, [1955] 2 QB 327 Ruling court Court of Appeal of England and Wales Judge sittings Alfred Denning, Baron Denning, Norman Birkett, 1st Baron Birkett, Hubert Parker, Baron Parker of Waddington Similar Adams v Lindsell, Felthouse v Bindley, Hyde v Wrench, Byrne & Co v Leon Van Tienhove, Carlill v Carbolic Smoke B | ||
Entores ltd v miles far east corporation 1955 2 qb 327
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.
Contents
Facts
Entores was a London-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, Entores, was based in the UK and under English law Entores could only bring the action in the UK (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, delivered 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.