Legal Case Summary
Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3; [1955] 2 QB 327; [1955] 3 WLR 48; [1955] 2 All ER 493; [1955] 1 Lloyd’s Rep 511
Contract – Acceptance – Postal Rule – Damages – Instantaneous communication
Facts
The complainants, Entores, were a company that was based in London. They had sent a counter-offer to purchase 100 tons of copper cathodes to the defendants, Miles Far East Corp. Miles Far East was an American corporation, acting through a Dutch agent in Amsterdam, and this counter-offer was communicated by Telex, a form of instantaneous communication. The Dutch company sent an acceptance of this offer by Telex to the complainants. When the contract was not fulfilled, the complainants tried to sue the defendants for damages.
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Issues
The issue was whether the contract was made in England, allowing service of the proceedings on the American defendant outside the jurisdiction. This depended on whether acceptance by Telex took effect when sent from Amsterdam or when received in London.
Decision/Outcome
The Court of Appeal held that the contract was made in London, where the acceptance was received. It dismissed the defendant’s appeal against permission to serve proceedings outside the jurisdiction. This was an interlocutory jurisdiction ruling; the claim for damages remained to be tried. It was stated that the postal rule did not apply for instantaneous communications. Since Telex was a form of instant messaging, the normal postal rule of acceptance would not apply and instead, acceptance would be when the message by Telex was received. Thus, the contract was created in London. This general principle on acceptance was held to apply to all forms of instantaneous communication methods. Denning LJ also explained that an offeror whose own fault caused a failure of receipt could be prevented from denying receipt where the sender reasonably believed the acceptance had arrived.
