Legal Case Summary
Brinkibon Ltd v Stahag Stahl [1983] 2 AC 34
Contract – Formation – Acceptance – Postal Rule – Jurisdiction – Instantaneous Communication – Offer
Facts
The complainants, Brinkibon Ltd, were a company that was based in London. They were buying steel from the defendants, Stahag Stahl, who were sellers based in Austria. The complainants sent their acceptance of the offer by Telex, which was to the defendants in Vienna. Brinkibon Ltd later wanted to sue Stahag Stahl for breach of contract and applied to serve an out of jurisdiction party.
Issues
The issue in this case concerned where the contract was formed, as the breach of contract could only be dealt with under English law if the contract was formed in England. Otherwise, as the defendant’s argued, the contract would be dealt with by Austrian law. The court had held that the contract was created in Austria and this decision was appealed. Another issue in the appeal was when the formation of a contract would be when using instantaneous communication, such as Telex.
Decision / Outcome
The appeal was dismissed and the courts held that the contract was formed in Austria and the breach of contract would have to go through Austrian courts. As the communication of acceptance was received by Telex in Vienna, this was when the contract was created. The court reaffirmed Entores v Miles Far East Co, which stated that the postal rule did not apply to instantaneous forms of communication, which would include Telex. However, the court also stated that there was no universal rule and each case would have to be resolved by looking at the intention of the parties and sound business practice.
Updated 19 March 2026
This summary of Brinkibon Ltd v Stahag Stahl [1983] 2 AC 34 remains legally accurate. The House of Lords’ ruling that acceptance by instantaneous communication takes effect when and where it is received, and its reaffirmation of Entores Ltd v Miles Far East Corporation [1955] 2 QB 327, continue to represent the established common law position in England and Wales. The court’s acknowledgement that no single universal rule applies, and that individual cases must be resolved by reference to the parties’ intentions and sound business practice, remains good law and has been consistently applied by subsequent courts.
Readers should be aware that the jurisdictional framework within which Brinkibon was decided has since changed significantly. The case was decided under rules that have been substantially replaced, first by Council Regulation (EC) No 44/2001 (the Brussels I Regulation) and then by the recast Brussels I Regulation (EU) No 1215/2012. Following the UK’s departure from the European Union, those EU instruments no longer apply in the UK. Jurisdictional questions involving foreign defendants are now governed primarily by domestic rules under the Civil Procedure Rules (CPR Part 6) and, for cross-border disputes, by any applicable bilateral or multilateral treaties. The substantive contract law principles discussed in the case are unaffected by these changes.
The article also does not address the growing body of case law and academic debate concerning how the Brinkibon approach applies to modern electronic communications such as email. While courts have generally treated email as analogous to other instantaneous forms of communication, this remains an area where the precise moment and place of contract formation can be uncertain, and readers engaged in research on electronic contracting should consult more recent sources.
