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Tinn v Hoffman (1873) Adams v Lindsell Action for non-delivery of wool according to agreement. At the trial at the last Lent Assizes for the county of Worcester, before Burrough J. it appeared that the defendants, who were dealers in wool, at St. Ives, in the county of Huntingdon, had, on Tuesday the 2d of September 1817, written the following letter to the plaintiffs, who were woollen manufacturers residing in Bromsgrove, Worcestershire: "We now offer you eight hundred tods of wether fleeces, of a good fair quality of our country wool, at 35s. 6d. per tod, to be delivered at Leicester, and to be paid for by two months' bill in two months, and to be weighed up by your agent within fourteen days, receiving your answer in course of post." This letter was misdirected by the defendants, to Bromsgrove, Leicestershire, in consequence of which it was not received by the plaintiffs in Worcestershire till 7 p.m. on Friday, September 5th. On that evening the plaintiffs wrote an answer, agreeing to accept the wool on the terms proposed. The course of the post between St. Ives and Bromsgrove is through London, and consequently this answer was not received by the defendants till Tuesday, September 9th. On the Monday September 8th, the defendants not having, as they expected, received an answer on Sunday September 7th, (which in case their letter had not been misdirected, would have been in the usual course of the post,) sold the wool in question to another person. Under these circumstances, the learned Judge held, that the delay having been occasioned by the neglect of the defendants, the jury must take it, that the answer did come back in due course of post; and that then the defendants were liable for the loss that had been sustained: and the plaintiffs accordingly recovered a verdict. Jervis having in Easter term obtained a rule nisi for a new trial, on the ground that there was no binding contract between the parties, Dauncey, Puller, and Richardson, shewed cause. They contended, that at the moment of the acceptance of the offer of the defendants by the plaintiffs, the former became bound. And that was on the Friday evening, when there had been no change of circumstances. They were then stopped by the Court, who called upon Jervis and Campbell in support of the rule. They relied on Payne v. Cave[1], and more particularly on Cooke v. Oxley[2]. In that case, Oxley, who had proposed to sell goods to Cooke, and given him a certain time at his request, to determine whether he would buy them or not, was held not liable to the performance of the contract, even though Cooke, within the specified time, had determined to buy them, and given Oxley notice to that effect. So here the defendants who have proposed by letter to sell this wool, are not to be held liable, even though it be now admitted that the answer did not come back in due course of post. Till the plaintiffs' answer was actually received, there could be no binding contract between the parties; and before then, the defendants had retracted their offer, by selling the wool to other persons. But the Court said, that if that were so, no contract could ever be completed by the post. For if the defendants were not bound by their offer when accepted by the plaintiffs till the answer was received, then the plaintiffs ought not to be bound till after they had received the notification that the defendants had received their answer and assented to it. And so it might go on ad infinitum. The defendants must be considered in law as making, during every instant of the time their letter was travelling, the same identical offer to the plaintiffs; and then the contract is completed by the acceptance of it by the latter. Then as to the delay in notifying the acceptance that arises entirely from the mistake of the defendants, and it

therefore must be taken as against them, that the plaintiffs' answer was received in course of post. Rule discharged. The ‘postal rule' in Adams v Lindsell has since been confirmed in Household Fire and Carriage Accident Insurance Co v Grant (1879) 4 EX D 216 where the defendant applied for some shares in a company. These were then allotted to him but he never received the letter of allotment. It was held that a contract existed. More recently, Adams v Lindsell has been reinforced by Brinkibon Ltd v Stahag Stahl and Stahlwarenhandelsgesellschaft GmbH [1983] 2 AC 34 where it was held that acceptance is effective when it is placed in the control of the Post Office, ie. placed in a post box or handed to an officer of the post. There are several theories about the rule in Adams v Lindsell. One such theory is that the rule prevents an offeree from accepting by post but then nullifying this acceptance by rejecting the offer by a quicker means of communication. Another theory is that without the rule an offeree would not be able to know for certain whether they had actually entered into a contract or not. It can be seen that in all cases one of the parties is going to suffer hardship, and the rule in Adams v Lindsell results in this party being the offeror rather than the offeree. This can perhaps be justified because when an offeror chooses to start negotiations by post he takes the risk of delay and accidents in the post. Furthermore, the offeror can avoid the rule in Adams v Lindsell by expressly stipulating that he is not to be bound until actual receipt of the acceptance. A further theory for the existence of the postal rule as adopted in Adams v Lindsell is that if the offeror, either expressly or impliedly, indicates that postal acceptance is sufficient then they should bear the consequences of the postal rule, as the defendant did in Adams v Lindsell. Moreover, Adams v Lindsell could be considered support for the idea that the offeror should be considered as making the offer all the time that the offer is in the post, and that therefore the agreement between the two parties is complete at the moment that acceptance is posted. In Adams v Lindsell itself it was suggested (at 683) that if the rule did not exist “no contract could ever be completed by the post. For if the [offerors] were not bound by their offer when accepted by the [offerees] till the answer was received, then the [offerees] ought not to be bound till after they had received the notification that the [offerors] had received their answer and assented to it. And so it might go on ad infinitum”. One further reason for the existence of the rule in Adams v Lindsell is that the Post Office can be considered to be the common agent of both parties, and therefore communication to this agent immediately completes the contract. However, where the letter is not addressed then this will not be enough. Therefore, mere delivery of the acceptance to the agent does not of itself complete a contract for the purpose of the rule in Adams v Lindsell. The Adams v Lindsell postal rule only applies when it is reasonable to use the post as a means of communicating acceptance. So, an offer made in a letter sent by post could be accepted by post. Yet at other times postal acceptance may be reasonable. For example in Henthorn v Fraser [1892] 2 Ch 27 it was held to be reasonable to post acceptance in response to an oral offer because the parties lived some distance away from each other. However, Adams v Lindsell will not normally apply where acceptance is made by post in

response to an offer made by telex, email or telephone. Furthermore, Adams v Lindsell will not apply if the acceptor knew that the postal service was at that time disrupted. Adams v Lindsell therefore has three consequences in English law. Firstly, a posted acceptance prevails over a previously posted withdrawal of the offer which had not yet reached the offeree when the acceptance was posted. Secondly, acceptance takes effect on posting even where it never reaches the offeror or only does so after delay. Finally, the contract is taken to have been made at the time of posting so as to take priority over another contract made after the original acceptance was posted.

Entores v Miles Far East Corporation (1955) Held that, although where a contract is made by post acceptance is complete as soon as the letter of acceptance is put into the post box, where a contract is made by instantaneous communication, e.g., by telephone, the contract is complete only when the acceptance is received by the offeror, since generally an acceptance must be notified to the offeror to make a binding contract; and that, since communications by Telex were virtually instantaneous, the contract in this case was made in London. Accordingly it was a proper case for service out of the jurisdiction under R.S.C., Ord. 11, r. 1 ( e).1 [1955] 2 Q.B. 327 Page 328 The facts, which are stated in more detail in the judgment of Denning L.J., were as follows: The plaintiffs, Entores Ld., were an English company with a registered office in London, and the defendants, Miles Far East Corporation, were an American corporation with headquarters in New York, and with agents all over the world, including a Dutch company in Amsterdam. Both the plaintiffs and the defendants' agents in Amsterdam had in their office an equipment known as Telex Service, by which messages could be dispatched by a teleprinter operated like a typewriter in one country, and almost instantaneously received and typed in another. The plaintiffs desired to make a contract with the defendants' agents in Amsterdam for the purchase of copper cathodes from the defendant corporation. In September, 1954, a series of communications by Telex passed between the plaintiffs and the Dutch company, the material one for the present purposes being a counter-offer made by the plaintiffs on September 8, 1954, and an acceptance of that offer by the Dutch agents on behalf of the defendants received by the plaintiffs in London by Telex on September 10, 1954. The plaintiffs later alleged that there had been a breach by the defendants of the contract. They accordingly applied for leave to serve notice of a writ on the defendants in New York on the ground that the contract was made in England and, therefore, fell within the terms of R.S.C., Ord. 11, r. 1 (e). It was contended for the defendants that the contract was made in Holland. The plaintiffs' application was granted by a master, and on appeal his decision was affirmed by Donovan J. The defendants appealed.

Gerald Gardiner Q.C. and S. B. R. Cooke for the defendants. The contract in the present case was not made in London and *329 was not therefore within the jurisdiction. The principal question raised by the appeal, on which English law is devoid of authority, is, when and at what place is a contract made when the negotiating parties are practically in instantaneous communication with each other by means of a telephone or, as in the present case, a Telex machine. So far as a contract made by correspondence is concerned, it has long been settled that the offer of a contract made by post is accepted when an acceptance is put in the post, and the contract is made at the place where that act was performed...