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Table of Contents 1. Entores v Miles Far East Corp: Summarization..........................................................................2 1.1. Facts...................................................................................................................................................2 1.2. Issue(s)..............................................................................................................................................2 1.3. Decision of the court......................................................................................................................2 2. Lord Parker’s judicial opinion.........................................................................................................2 3. How the principles established from Entores’ case can be applied to cover the developments in business technology since 1955........................................................................3 BIBLIOGRAPHY......................................................................................................................................5

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1. Entores v Miles Far East Corp: Summarization 1.1. Facts Entores Ltd. (the “Plaintiff”) was a company duly established and operating under the laws of United Kingdom. They offered Miles Far East Corporation, a US-based company (the “Defendant”) for buying copper cathodes through telex communication. As a result, the response for acceptance was communicated through Telex.

The Plaintiff claimed that the Defendant had breached the contract. To get permission from the English courts to serve their claim out of the jurisdiction, the Plaintiff must have proved that the formation of the contract was in London. The Defendant later claimed for the application of postal rules in this case. This meant that their acceptance was valid at the moment it was sent in the Netherlands. Consequently, the contract was entered into in the Netherlands. 1.2. Issue(s) In order to decide where the contract between them was entered into, it was necessary to identify when the offeree gave the acceptance. If the postal rule was applied and the contract was incorporated when the acceptance was sent, the Dutch laws would govern. In contrary, English laws would govern their contract. 1.3. Decision of the court The court held that the governing laws for the contract would be English laws. Judges concluded that the postal acceptance rule would not be applied in this case due to instantaneous communication. When delivering acceptance through Telex, the Defendant could immediately receive the message. Thus, the court concluded that the acceptance time would be when receiving the notification by Telex. As a result, the formation of the contract was in London. 2. Lord Parker’s judicial opinion Lord Justice Parker had the same opinion as Lord Denning and Lord Birkett regarding the instantaneous communications between the parties, he agreed that it is different from the postal acceptance rule. Lord Parker did not give any counter-argument to the statements of the other judges when stating that the completion of incorporating the contract was when the acceptance was sent by the offeree and must be received by the offeror, and the place of incorporating the

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contract was where the acceptance was received. There could not be any legally binding contract if the acceptance was not completely and successfully delivered. In addition, Lord Parker stated that ‘a binding contract is made at the place where the offeror receives notification of the acceptance’1. However, he noted that the requirement for factual notification of the acceptance was for the offeror's benefit. It might be waived, and the offeror might agree to replace this requirement for the acceptor. Thirdly, Lord Parker also emphasized the distance issues. The contractual might communicate with the other contractual party at the same time. Thus, he concluded that ‘there is no need for any such rule of convenience’2. Otherwise, there would be no room for the general rule's operation that notice of acceptance must be received. Finally, Lord Parker concluded that ‘there is no binding contract until notice of the acceptance is received by the offeror’3. 3. How the principles established from Entores’ case can be applied to cover the developments in business technology since 1955.

The formation and legal issues related to distance contracts have been two of the controversial issues in contract formation law. The postal acceptance rule originated from the case Adams v Lindsell4 regarding the consideration on when the contract was incorporated through post. The judges held that it was not sure about the communication time of the acceptance when delivered through post. The time, the laws and the social relationship went on, the instantaneous communication existed and it was controversial that whether to the doctrine of the postal acceptance rule was applicable to these new methods. Under the English laws in twentieth one century, postal acceptance rule is believed to having smaller roles in contract laws5. Several new communication methods, such as telex, phone call, are so instantaneous and comfortable that it seems to communicate face-to-face, everywhere and whenever, even though they are extremely far apart, as in Entores case6. However, these new communication methods make people believe that an acceptance that is sent during normal working hours, working days means that this acceptance have been well

1 Entores v Miles Far East Corp 2 Ibid 3 Ibid 4 Adams v Lindsell 5 Turner, Chris. Contract Law, Taylor & Francis Group, 2014 6 Entores v Miles Far East Corp

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received7. The problem arises when the acceptance is already delivered does not mean that the other party may receive this acceptance well, Lord Fraser have dealt with and solved this issue in Brinkibon Ltd v Stahag Stahl8 and held that ‘Even though with telex the message may not be received by the intended recipient immediately, a telex that goes directly from the offeree’s business to the offeror’s business should be treated as if it were an instantaneous communication’9. This means the person receiving the message / acceptance owns the responsibility and risk no matter what. This is also confirmed by the judge in Mondial Shipping and Chartering BV v Astarte Shipping Ltd10 where a message was sent not in the working day or working hour (Monday to Friday) was concluded to only be completely delivered on the next working day. This seems fair because a message is sent does not mean that the message is completely communicated and the other party have well received the message at the time of sending11. The liability for the receiving party only arises at the time when they have to start working. In conclusion, it is argued that the doctrine of instantaneous communication regarding the contract formation seems to be more succinct and fairer than the postal acceptance rule 12. These methods have existed for many years since the decision given in Entores’ case and have had little or no effect on trade. Thus, it may be argued that the instantaneous communication methods for acceptance are acceptable by society. The court also have applied and extended the application scope of this doctrine, including recognizing acceptances delivered through many modern methods13, e.g. telephone, facsimiles.

7 Donald Nolan, Offer and acceptance in the Electronic Age (2010), Contract formation and Parties, p. 61 - 87 8 Brinkibon Ltd v Stahag Stahl 9 Ibid 10 Mondial Shipping and Chartering BV v Astarte Shipping Ltd 11 Donald Nolan, Offer and acceptance in the Electronic Age (2010), Contract formation and Parties, p. 61 - 87 12 Poole, Textbook on Contract Law (10th edition 2010), Oxford University Press 13 Kathryn O'Shea and Kylie Skeahan, Acceptance of Offers by E-Mail - How Far Should the Postal Acceptance Rule Extend? (1997), Vol 13 (1997): QUT Law Journal

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BIBLIOGRAPHY -

Case

1. Entores v Miles Far East Corp [1955] 2 QB 327 2. Adams v Lindsell [1818] 1 B &Ald, 681 3. Brinkibon Ltd v Stahag Stahl [1983] 2 AC 34 4. Mondial Shipping and Chartering BV v Astarte Shipping Ltd [1995] 2 Lloyd's Rep 249;. [1995] CLC 1011 -

Books, textbook, journal

1. Turner, Chris. Contract Law, Taylor & Francis Group, 2014. 2. Donald Nolan, Offer and acceptance in the Electronic Age (2010), Contract formation and Parties, p. 61 – 87. 3. Poole, Textbook on Contract Law (10th edition 2010), Oxford University Press. 4. Kathryn O'Shea and Kylie Skeahan, Acceptance of Offers by E-Mail - How Far Should the Postal Acceptance Rule Extend? (1997), Vol 13 (1997): QUT Law Journal -

Other references

1. Entores v Miles Far East Corp [1955] 2 QB 327, in text Available at: https://www.bailii.org/ew/cases/EWCA/Civ/1955/3.html Accessed 28th December 2020.

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